subscriptions: tuesday

■■ BY JIM COLE

To some outsiders, WashingtonMutual Inc. seems to be in a stateof perpetual flux.

But Kerry K. Killinger, the $351billion-asset Seattle thrift compa-ny’s chairman and chief executive,says the changes that it is undergo-ing, while significant, are bringingit closer to its intended aim: amore banklike business less relianton conventional mortgages.

The goal has the company jetti-soning some elements of a balance

sheet that had been put togetherin significant measure by acquisi-tions. In July, Wamu embarked onthe sale of a big chunk of its mort-gage servicing portfolio to reduceearnings volatility. Also lastmonth, it agreed to sell its assetmanagement unit and said itwould increase its focus on corebusinesses.

AUGUST 8, 2006YESTERDAY’S MARKETS

American Banker 225 ▼ 0.6%American Banker 50 ▼ 0.3%Dow Jones Industrial Average ▼ 0.2%

Standard & Poor’s 500 ▼ 0.3%

10-year Treasury yield 4.921%, up 0.026

T H E F I N A N C I A L S E R V I C E S D A I L YVolume CLXXI No . 151 www.amer i canbanke r. com

WASHINGTON

RReepp.. NNeeyy, who heads the HouseFinancial Services housingsubcommittee, said he wouldnot seek reelection. Page 3

COMMUNITY BANKING

FFiivvee bbaannkkss are backing aFlorida effort to redevelop poorareas through for-profitcommunity developmentcompanies. Page 5

INDUSTRY SNAPSHOT

CCrreeddiitt uunniioonnss with the mostassets and deposits. Page 6

CARDS

CCiittyy HHoollddiinngg of W.Va. will sellmost of its credit card portfolioto Elan Financial, a U.S.Bancorp subsidiary. Page 9

MORTGAGES

FFiirrsstt AAmmeerriiccaann, a title insurancegiant, bought Offutt Systems,which sells multiple listingservice technology. 0

TECHNOLOGY

HHaarrllaanndd’’ss eeaarrnniinnggss fell, butgrowth in the check printer’ssoftware division helped offsetdeclining check sales. Page 11

CCyypphheerrmmiinntt has developed amobile payment system linkedto its prepaid cards. Page 12

INSURANCE/INVESTMENT PRODUCTS

CCiittiissttrreeeett has added productsand sales staff as it wadesdeeper into the small-businessretirement market. Page 13

FFrreemmoonntt MMiicchhiiggaann IInnssuurraaCCoorrppreported that its second-quarterearnings grew 51.2%. Page 13

MARKETS

PPuueerrttoo RRiiccaann banking stocksreceived a lift when an analystupgraded five of the island’scompanies. Back page

CCoonnssuummeerr ccrreeddiitt expanded at arapid clip in June, led by gainsin revolving credit, the Fedreported. Back page

SUBSCRIPTIONS: 800-221-1809

TUESDAY

4.0

J’05

J A S O N D J’06

F M A M J

1.9

2.3 2.2 2.22.5 2.6 2.6 2.7

2.8 2.9

3.53.7

Bank routing/ transit numbers that are image-capable, from the Federal Reserve and Eccho. Numbers in thousands

Story on page 12

Receiving Images

An InnocentQuestion?Small BanksDon’t Buy It ■■ BY JOE ADLER

WASHINGTON — It was just a briefmention of an idea, a single ques-tion in a 152-page plan distrib-uted by the Federal Deposit Insur-ance Corp. last month.

The question: Whether tochange the treatment of HomeLoan Bank advances for federaldeposit insurance rate-settingpurposes.

The weeks since have seen abacklash from community bankersand industry representatives whosee in the question the possibilityof a policy change that they saywould undermine the Home LoanBank System and unfairly punishthousands of community banksthat use advances for funding.

“We will scream to the highheavens about this,” said CamdenFine, the president of the Inde-pendent Community Bankers ofAmerica.

The agency touched on theidea in its July 11 proposal out-

Part of IrwinLending UnitHas Acquirer■■ BY JODY SHENN

More than six months afterputting its first mortgage businesson the block, Irwin FinancialCorp. said that it has a deal to sellthe origination platform, and thatthe $19.2 billion servicing portfo-lio should be sold soon.

The Columbus, Ind., companyhas said since January that it wasseeking to divest its Irwin Mort-gage Corp. to refocus on commer-cial banking, small-business lend-ing, and a struggling home equitybusiness it recently restructured.Irwin Financial has also said it didnot want to commit the capitalnecessary to garner acceptableprofits in the highly commoditizedconforming mortgage business.

“Six months was longer thanwe hoped” to wait for a deal, “butwe think this is a very good out-come,” Will Miller, Irwin Finan-cial’s chairman and chief execu-tive, said on a conference callMonday. The company did not sayhow much it would get for theorigination platform, and it hint-ed that it is still not sure whetherselling the servicing portfoliowould produce a gain or loss.

The privately held Mt. Laurel,

On track: Deals to sell a mortgage servicing portfolio and an asset manage-ment unit “are totally consistent” with the “five-year plan,” Killinger says.

Wamu on Latest AlterationsShift to banklike sheet tests Wall St. patience

First Deal Outside RegionWon’t Be Chicagoan’s Last■■ BY BEN JACKSON

With its deal for PiedmontBancshares Inc. of Atlanta, Private-Bancorp Inc. is following throughon its pledge to expand outside theMidwest and into fast-growingsouthern and western markets.

The Chicago company, whichtargets wealthy households,agreed to pay $47 million in cashand stock for the $217 million-asset Piedmont. Ralph B. Mandell,its chairman, president, and chief

executive, said in an interview Fri-day that even before making thePiedmont deal, his $3.7 billion-asset company had the “internalmuscle” — capital, staff, back-office capability — to pursueexpansion to new markets byacquisitions or bank start-ups.

Those markets includePhoenix/Scottsdale and Florida“for sure,” Mr. Mandell said. Pri-vateBancorp currently has offices

See page 3See page 2

See page 5

See page 10

AMERICAN BANKER MAIN 08-08-06 A 1 ABNEWS 8/7/2006 5:32 PM Page 1

Those announcements cameagainst a backdrop of office con-solidation, layoffs, and the out-sourcing of back-office opera-tions to other countries.

Mr. Killinger said Wamu’s lat-est retooling is a far cry from its2003-04 one, when it slashedjobs and sought ways to stabilizethe mortgage business after a bigslowdown a year earlier. (In thesecond quarter of 2004 profitsfrom its home loan businessdropped to zero, from $531 mil-lion in the first quarter and $611million a year earlier.)

“There is really quite a differ-ence” between the changes thecompany made in 2003 and 2004and those taking place today, Mr.Killinger said in an interviewJuly 19, the day his companyreported second-quarter earn-ings. The latest changes are“opportunities to acceleratesome of the things we have beenworking on.”

For several years he has beentransforming Wamu’s balancesheet to diminish interest raterisk, and along the way has takensteps that have added credit risk.

Some signs of the shift: Primemortgages and mortgage-backedsecurities now make up 44% ofWamu’s assets, versus 76% at theend of 1999. Subprime mort-gages make up 6%, up from 2%.Home equity loans make up15%, up from 5%. Credit cards,added last year, make up 3%.

Multifamily and commercialreal estate loans make up 9%,down from 10%, and loans heldfor sale now make up 7%.(Wamu had none at the end of1999.) Other assets, whichinclude cash and short-terminvestments, make up 16% com-pared to 7% at the end of 1999.

When it released its second-quarter results, Wamu said it wasselling $2.6 billion of mortgageservicing rights and its Milwau-kee servicing facility to WellsFargo & Co. of San Francisco.

A few days later Wamu said itwas selling its asset managementunit WM Advisors to PrincipalFinancial Group.

“All these things are totallyconsistent with what we havelaid out in our five-year plan,”Mr. Killinger said in the inter-view.

In a conference call earlierthat day, he said, “The sale of theMSR was about reducing themarket risk or interest rate riskin the company. As we’ve indi-cated in our strategic plan, wewant to gradually shift to muchmore of a banklike balancesheet.”

Wamu has said that this quar-ter it would take a $52 millionrestructuring charge tied to thetransaction with Wells Fargo.

Some analysts are wonderingwhen the restructuring will bedone.

“Every time you turn around,there are these types of sales.There is always a restructuringcharge. There is always ‘We’regetting our expenses down,’ butthe expenses creep up. I thinkthe sloppiness of the numbersthey report is starting to wear onpeople,” said Paul Miller, an ana-lyst with Friedman, Billings,Ramsey & Co. Ins., said in aninterview July 27.

During the conference call,Mr. Killinger acknowledged thatthe steps announced that day“are likely to cause our quarterlyearnings to be more uneven thannormal,” but he also said theywould contribute 5-10 cents toearnings per share next year.

When mortgage originations

plummeted, Wamu laid off 4,500people in late 2003 and another2,900 in 2004.

It has also announced a stringof layoffs this year. In the firstquarter it cut the number ofhome loan processing offices byover a third, to 16, laying off2,500 people. In May it saidwould cut 1,400 workers as itclosed two call centers, and lastmonth it cut 900 jobs in its retailbanking and home loan opera-tions.

During the 2003-04 down-turn, Wamu sold its consumerfinance division to CitigroupInc. for $1.5 billion and used theproceeds to sustain its 250-branch-a-year retail bankingexpansion. Analysts said, backthen and recently, that Wamu’stroubles in those years wereaggravated by the failure to inte-grate acquisitions made in 2001and 2002 to beef up the mort-gage business.

“Clearly there has been anevolution of strategy. It doesn’tseem like it was too long agothat Wamu was talking aboutwanting to become a trillion-dollar servicer, and now theyare clearly going the oppositeway,” said Frederick Cannon, ananalyst with Keefe, Bruyette &Woods Inc.

Acquisitions remain part ofthe transformation strategy. Lastyear Wamu bought the SanFrancisco credit card issuer Pro-vidian Financial Corp., and thisquarter it expects to close a $983million deal for CommercialCapital Bancorp Inc., a $6 bil-lion-asset multifamily lender inIrvine, Calif.

But those efforts are a sharpchange from five years ago, whenWamu was focused on bulkingup the mortgage business.Wamu bought the Houston

thrift company Bank UnitedCorp. in February 2001, and itbought the mortgage portfoliosof PNC Financial ServicesGroup Inc. in October 2000 andFleetBoston Financial Corp. inJune 2001. Wamu also boughtthe New York thrift companyDime Bancorp Inc. in January2002.

Mr. Killinger said three ofWamu’s business lines — retailbanking, card services, and com-mercial banking — are hum-ming along.

“The one business that neededmore of a strategic shift in direc-tion was our home lending busi-ness. What we became convincedof was that we would be betteroff in focusing our efforts in thehigher margin businesses ofoption ARMs, home equity, alt-A, and subprime,” he said.

Analysts said that theyendorse Wamu’s effort to shrinkits mortgage servicing portfolio,which should reduce the earn-ings volatility that comes fromvaluing the servicing portfolioquarter-to-quarter.

“They are looking to garnermore stable income flows asopposed to tying themselves tothe more volatile servicing andproduction,” said EdwinGroshans, an analyst at Fox-Pitt,Kelton Inc. “The issue is theycan’t just cut and run from thatbusiness.

They are fully tied into it —they have a national servicingplatform, a national originationplatform, they are in retail, theyare in subprime, they are inwholesale, they are in the con-duit channel. It is a big part ofwhat they do.” ■

2 TUESDAY, AUGUST 8, 2006 AMERICAN BANKER

AAcacia Federal Savings . . . . . . . . .1America’s Community Bankers . .1American Bankers Association . . .1Anchor BanCorp Wisconsin . . . .20

BBank of America . . . . . . . . . . .5,20BankAtlantic . . . . . . . . . . . . . . . .1Brean Murray, Carret . . . . . . . . .20

C - DCelent . . . . . . . . . . . . . . . . . . . .13Citigroup . . . . . . . . . . . . . . . . .5,13Cyphermint . . . . . . . . . . . . . . . .12Doral Financial . . . . . . . . . . . . .20

EeBay . . . . . . . . . . . . . . . . . . . . . .12Eurobancshares . . . . . . . . . . . . .20

FFederal Home Loan Bank

of Boston . . . . . . . . . . . . . . . . .1Fifth Third . . . . . . . . . . . . . . . . . .5First BanCorp

(San Juan, P.R.) . . . . . . . . . . . .20First Data . . . . . . . . . . . . . . . . . . .9Fiserv . . . . . . . . . . . . . . . . . . . . . .9Florida Minority Community

Reinvestment Coalition . . . . . . .5Fox-Pitt, Kelton . . . . . . . . . . . . . .1Freedom Mortgage . . . . . . . . . . . .1Friedman, Billings, Ramsey . . . . .1

G - HGlobalBridge . . . . . . . . . . . . . . .13Greater Bay . . . . . . . . . . . . . . . .20Greenlining Institute . . . . . . . . . .5Howe Barnes Hoefer & Arnett . . .1

IIndependent Community Bankers

of America . . . . . . . . . . . . . . . .1International Data Group . . . . . .12

Irwin Financial . . . . . . . . . . . . . . .1

J - LJanney Montgomery Scott . . . . . .9Keefe, Bruyette & Woods . . . . .1,20Litchfield Bancorp . . . . . . . . . . . .1

M - NMarsh & McLennan . . . . . . . . . .13Marshall & Ilsley . . . . . . . . . . . . .9Mason-McDuffie Financial . . . . .20Mercator Advisory Group . . . . . .9Morgan Stanley . . . . . . . . . . . . . .9

OOriental Financial . . . . . . . . . . .20

P - QPiedmont Bancshares . . . . . . . . . .1Popular . . . . . . . . . . . . . . . . . . .20PrivateBancorp . . . . . . . . . . . . . .1

RR&G Financial . . . . . . . . . . . . . .20

SSantander BanCorp . . . . . . . . . .20State Street . . . . . . . . . . . . . . . . .13Sterling Financial (Spokane) . . .20Sterne Agee & Leach . . . . . . . . . .20

T - VTelacu Community

Development Corp. . . . . . . . . . .5Transnational Financial

Network . . . . . . . . . . . . . . . . . .1

W - ZW Holding . . . . . . . . . . . . . . . . .20Wachovia . . . . . . . . . . . . . . . . . . .5Washington Mutual . . . . . . . . . . .1Wells Fargo . . . . . . . . . . . . . . . . .5

This index lists significant references to companies and banks in today’s issue.Page numbers refer to where stories begin.

COMPANY INDEX

Customer ServiceFor Subscriptions, Renewals, Changes, or Problems, call 800-221-1809 or 212-803-8333. Fax

Number: 212-292-5216. E-Mail Address: [email protected] Permission to Reprint Published Material, call 800-367-3989 or 212-803-8367. Those regis-

tered with the Copyright Clearance Center (222 Rosewood Drive, Danvers, Mass., 01923) have permis-sion to photocopy articles. The fee is $10 per copy. Copying for other than personal use or internal ref-erence is prohibited without express permission.

Subscription Rates: U.S.: $945 a year. Canada: US $995. Airmail and foreign: US $1,195. Singlecopies: $10. Due to age or special content, some single issues are priced higher.

American Banker (ISSN 0002-7561) is published daily, except for Saturday, Sunday, federal holidays,Good Friday, and the day after Thanksgiving, by SourceMedia, Inc. One State Street Plaza, New York, N.Y.10004. Periodical rate postage paid at New York, N.Y., and additional U.S. mailing offices.

Postmaster: Send address changes to American Banker, One State Street Plaza, 27th floor, New York, N.Y.10004.

© 2006 American Banker and SourceMedia, Inc. All rights reserved.

Wamu CEO: This Transformation Is Different

M&A Announcements for Week Ended Aug. 4WHOLE INSTITUTION

Payment Price Price to Price toBuyer Seller type (millions) equity net income*

PrivateBancorp, Inc. Ill. Piedmont Bancshares Inc. Ga. cash/stock $46.6 3.31 25.17

Community Bank System Inc. N.Y. ONB Corp. N.Y. cash 15.7 1.72 20.47

Olympic Bancorp Inc. Wash. MarinerBank Wash. cash 16.0 2.50 28.47

Bradford Bank Md. Valley Bancorp Inc. Md. cash 9.6 1.90 31.61

BRANCHESPremium Number of

Buyer Seller (millions) branches

Mid Penn Bancorp Inc. Pa. Omega Financial Corp. Pa. NA 2

Orrstown Financial Services Inc. Pa. Omega Financial Corp. Pa. NA 1

*Last 12 months Source: SNL Financial

Continued from page 1


lining its plan to better tie aninstitution’s premium with its riskto the Deposit Insurance Fund. Ina request for comment, theagency asked whether HomeLoan Bank advances should betreated as “volatile liabilities,” orwhether it should charge “higherassessment rates to institutionsthat have significant amounts ofsecured liabilities.”

Both ideas would effectivelyraise premium rates for bankswith Home Loan bank advances.

Under the plan, the agencywould consider several financialratios in determining an institu-tion’s premium, including itsvolatile liabilities as a percentageof gross assets. Deeming advancesas volatile liabilities would raisethat ratio, and result in a bankpaying a higher premium. Sinceadvances are also a type of securedliability, charging more for suchliabilities would also increase abank’s assessment.

The FDIC signaled that it didnot intend to change the proposalto treat advances as volatile liabil-ities or charge higher assessmentrates. Doing so, it acknowledgedwould penalize “those institutions… that have traditionally reliedon” advances.

But the very mention of theidea riled bankers and industryrepresentatives.

F. Weller Meyer, the presidentand chief executive officer of the$1.2 billion-asset Acacia FederalSavings Bank in Falls Church, Va.,said he did not understand whyadvances would be consideredvolatile liabilities. The risk to thefund from advances is “nonexis-tent,” he said.

“I’m puzzled as to why anyonewould think that they werevolatile,” said Mr. Meyer, who isalso the chairman of America’sCommunity Bankers. “If you talkto most community bankers inthe country, I think they’ll tell youthat they consider it a very impor-tant tool in managing their liabil-ities. … Long-term advances helpfund housing loans in theirrespective communities.”

“Advances should not be con-sidered volatile liabilities,” saidMr. Fine, a former communitybanker. “If they were consideredthat, it would have changed thewhole profile of my bank.”

“Well-managed banks knowhow to manage these borrowingsas well as they manage deposits,which are also borrowings,”

agreed Mark Macomber, a FederalHome Loan Bank of Boston boardmember and the president of the$188 million-asset Litchfield Ban-corp in Connecticut.

“We’d rather have deposits,because that means customers,” Mr.Macomber said. “But the advancesare proxies in the sense that if wecan’t get deposits, the advances areanother source of funding.”

James Chessen, the AmericanBankers Association’s chief econo-mist, said the idea is sure to “drawa lot of fire.”

“From a risk managementstandpoint,” advances are “a greattool for community banks,” Mr.Chessen said. “Anything that rais-es the cost of using advanceswould be viewed very negatively.”

The FDIC has long held thatadvances raise the cost of bankfailures because Home Loanbanks can collect collateral aheadof the agency. Home Loan bankscan also structure advances so thatthe banks can take them back if aborrower becomes troubled, and

such a recall could trigger a fund-ing crisis leading ultimately to abank failure.

Advances “increase risk expo-sure” to the Deposit InsuranceFund, FDIC Chairman Sheila Bairsaid during a July 19 speech to theNew York Bankers Association.

A 2003 report by the FDIC’sAdvisory Committee on BankingPolicy also found that banks thatrely on advances over deposits forfunding would pay less in premi-ums because assessments arecharged based on deposits.

The popularity of advancesgrew markedly in the late 1990s,according to figures from the Fed-eral Home Loan Bank System.Advances to system membersjumped from $161 billion inDecember 1996 to $620 billion bythe end of 2005.

FDIC officials said they are justasking for comment, and reiterat-ed that the current proposalwould not charge more for bankswith Home Loan bank advances.

“We have proposed a treatmentfor advances, but we also wantedto be explicit about asking forcomment,” said Arthur Murton,the director of the FDIC’s divisionof insurance and research.“Depending on the comments,” hesaid, the agency’s board of direc-tors “might then decide on a dif-ferent direction.” Comments onthe proposal are due Sept. 22.

Many observers say that if theFDIC does not clear the matter upnow, it will resurface.

“If it’s not included in the def-inition of volatile liabilities in thefinal rule, I can see this issue con-tinuing to be on the table, becauseit’s been there for almost 20 years,”said Bert Ely, a banking analystbased in Alexandria, Va. ■

AMERICAN BANKER W A S H I N G T O N TUESDAY, AUGUST 8, 2006 3

The Financial Services Daily

Established 1836One State Street Plaza, 27th floor, New York, NY 10004 Phone 212-803-8200 Fax 212-843-9600

www.americanbanker.com

EDITOR-IN-CHIEF: David Longobardi

MANAGING EDITOR: Richard Melville

ASSISTANT MANAGING EDITOR: Barbara A. Rehm

Special Reports Editor: Marian Raab

Online Product Manager, Banking Group: Andrew Innes

Associate Editor: Todd Davenport

WASHINGTON (202-347-5529)Bureau Chief: Rob Blackwell

Reporters: Joe Adler, Stacy Kaper, Steven Sloan

NATIONAL/GLOBAL/MARKETS Editor: Niamh Ring

Southeast: Paul Davis (336-852-9496) West: Jim Cole (415-277-5943) Midwest: Tim Mazzucca (202-434-0316) Reporters: Laurie Kulikowski, Matthias Rieker

COMMUNITY/REGIONAL (202-347-5529)Editor: Alan Kline Deputy Editor: Bonnie McGeer

Southeast: Luke Mullins West: Katie Kuehner-Hebert (858-576-1077)Midwest: Ben Jackson (312-983-6101) AB Texas: Marissa Fajt (512-916-8783)

MORTGAGES/CONSUMER FINANCE Editor: Marc Hochstein Deputy Editor: Jody Shenn

Reporters: Erick Bergquist, H. Michael Jalili

INVESTMENT/INSURANCE PRODUCTSEditor: Terry Bormann Deputy Editor: Matt Ackermann

TECHNOLOGY/PAYMENT SYSTEMS Editor: Will Wade Deputy Editor: Steve Bills

Reporters: David Breitkopf, Daniel Wolfe

Deputy Editor (VIEWPOINTS; state/regional editions): Katherine Kane (503-582-9237)

COPY DESKChief: Paul Pearson

Copy Editors: Neil Cassidy, Martha E. Musgrove

ART/PRODUCTIONDirector: Debbie Fogel

Production Editors: Brian Lewis, Donna Riley-Cook, Keith WrightArtist: Carl Zeichner

Photo Editor: Michael Chu Assistant Photo Researcher: Jeff Blakeslee

Research Specialist (Statistics): James Petrassi

AMERICAN BANKER ONLINEEditor: Adam Silverstone Assistant Editor: Christopher Wood

PUBLISHER: Bruce Morris (212-803-8800)

ADVERTISINGDirector of Advertising Sales: Tim Reifschneider (212-803-8686)

Southeast: Edward Melinger (312-983-6195) Midwest/Texas: Barry Cohen (312-983-6171)West: Beatrice Stonebanks (510-339-3692)

Mid Atlantic/Northeast: Robert A. Wagner (212 803-8317)Group Director Custom Marketing Solutions: Virginia Wiese (704-987-3224)

Director of Marketing: Louis Cassetta (212-803-8328)Senior Marketing Manager: Jody Maze (212-803-8408)

CLASSIFIED [email protected] (800-221-1910)

Account Manager: JoAnne Kao (212-803-8306)

AMERICAN BANKER [email protected]

Director of Advertising Sales: Tim Reifschneider (212-803-8686)

CIRCULATION/CUSTOMER SERVICESubscriptions: [email protected] Renewals: (800-356-4763)

Customer Service: [email protected] (800-221-1809)Reprints: Joylyn Yaw (800-367-3989)

Director of Finance: Kevin Post (212-803-8393)Group Circulation Director: Michael O’Connor (212-803-8324)

DISTRIBUTION/PRODUCTIONDistribution Manager: Mark Ferrara (212-803-8302)

Executive Director of Manufacturing: Stacy Ferrara (212-803-8293)Associate Production Manager: Brian Goldman (212-803-8454)

Fulfillment Director: Jessica Reid (212-803-8246)

Chairman and Chief Executive Officer James M. Malkin ■ Chief Financial Officer William JohnstonChief Technology Officer Jeff Scott ■ President, Banking and Corporate Groups Bruce MorrisPresident, Securities Group Frank Quigley ■ Senior Vice President, Operations Celie Baussan

Vice President, Human Resources Robert DeNoia ■ Vice President, Finance Richard AntoneckExecutive Vice President, Marketing and Strategic Planning Anne O’Brien

Ney Calls Off Reelection BidRep. Bob Ney, the chairman of

the House Financial Services hous-ing subcommittee, announcedMonday that he will not seekreelection.

The Ohio Republican is underinvestigation for his alleged con-nection to the lobbyist JackAbramoff.

Though Rep. Ney denies anywrongdoing, he said he does notwant to continue to put his familythrough an “ordeal.”

His announcement was a blowfor some in the financial servicesindustry, who called the lawmak-er approachable and willing towork across party lines to craft

legislation.He co-sponsored a bill with

Rep. Paul Kanjorski, D-Pa., toestablish federal standards tocurb predatory lending. Industryrepresentatives support the bill,but many community groupsoppose it.

Rep. Ney has also worked onseveral housing-related bills.

Depending on which party winscontrol of the House and othercommittee assignments, Reps.Deborah Pryce, Sue Kelly, andMaxine Waters are among thosewho could succeed Rep. Ney as thehead of the housing subcommit-tee, sources said. — Stacy Kaper

Community Banks See ThreatIn Question on FHLB Advances

Meyer: Advances’ risk to the DepositInsurance Fund is “nonexistent.”

Blo

ombe

rg N

ews



Integrating Insurance& Securities With

Traditional Bank ServicesCan Be Puzzling

Integrating Insurance& Securities With

Traditional Bank ServicesCan Be Puzzling

Learn How The Pieces Fit Together Learn How The Pieces Fit Together

BankingBankingSecuritiesSecurities

InsuranceInsuranceBuilding A

Successful Sales TeamBuilding A

Successful Sales Team

CEOsCEOs

CommericalBanks

CommericalBanks

Program

ManagersProgram

Managers

Retail BanksRetail Banks

Progra

mMan

agers

Progra

mMan

agers

Insurance

AgenciesInsurance

Agencies

Broker/DealersBroker/Dealers

RIAsRIAs

TPMTPM

Risk

Manag

emen

t

Risk

Manag

emen

t

ComplianceCompliance

RegulationsRegulations

Operations/InfrastructureOperations/

InfrastructureManagement

Mar

kets

Mar

kets

DistributionDistribution

September 16-19, 2006 • Omni Interlocken Resort • Broomfield, Colorado

Space is limited!CALL 610.989.9047 EXT. 13E-MAIL [email protected]

FAX 610.989.9102VISIT www.bisanet.org

MarketSegmentsMarket

Segments

Life and

Key ManLife and

Key Man

Wealth

ManagementWealth

Management Trust

Trust

Management


AMERICAN BANKER C O M M U N I T Y B A N K I N G TUESDAY, AUGUST 8, 2006 5

PrivateBancorpPlans More M&AOutside Midwestin its home market and the Mil-waukee, St. Louis, and Detroitmarkets.

PrivateBancorp has the currencyto make acquisitions. Its assets havenearly doubled in the last two yearsand its market capitalization isnow close to $1 billion. After itannounced the Piedmont dealThursday, its stock price soared toa 52-week high, though it retreatedsome in profit-taking on Friday.

But Mr. Mandell said that whenit comes to buying or building in anew market “we can go in eitherdirection.”

The key, he said, is findingbankers expert in their markets. Insome cases — as it did in St. Louisand Milwaukee — PrivateBancorpwill hire teams of bankers to openoffices in new markets.

But “if the people are in anestablished bank, then we are morethan willing to make an acquisi-tion,” Mr. Mandell said.

PrivateBancorp’s last purchasewas in June 2005, when it paid $64million in cash for the $314 mil-lion-asset Bloomfield Hills Ban-corp Inc. of Michigan.

Mr. Mandell said demographicswere among the qualities his com-pany liked about the five-year-oldPiedmont. Atlanta is precisely thetype of market PrivateBancorpwants to enter — it has more135,000 households with annualincomes over $150,000. Mr. Man-dell said he is also looking foropportunities in cities that attractyoung people, because that is agood indicator a market will bestrong over the long term.

Brian D. Schmitt, Piedmont’sCEO, said his bank, which hasfocused on small- and middle-market business lending, neededto make a move to take care of itslarger borrowers. Managing theirwealth and assets “is somethingthat has always intrigued us, butto be honest, we didn’t have thepeople, talent, and capital to investin it,” he said.

Piedmont, which is to berenamed The PrivateBank, alsowants the capability to make largerloans, Mr. Schmitt said.

The bank has been forced toshare large loans to some of its bestcustomers with other banks. Afterit merges with PrivateBancorp, itwill be able to keep those loans in-house, Mr. Schmitt said.

“I’m getting tired working hard

and giving away a lot of it,” he said.“I’d rather ship it up to Chicagoand keep it under the sameumbrella, because we all benefit.”

Daniel E. Cardenas, the directorof research at Howe Barnes Hoefer& Arnett Inc., in Chicago, said Pri-vateBancorp is selective aboutwhere it expands and has madegood choices so far.

Bloomfield Hills Bancorp “had alot of similarities to PrivateBank,”so that deal “made good strategicsense,” Mr. Cardenas said.

Piedmont Bancshares is small,he said, but buying it would givethe Chicago company a goodgrowth platform in one of thenation’s fastest-growing markets.

Investors seemed to favor thedeal, which is expected to closenext quarter. PrivateBancorp’sstock closed at $47.51 on Thursdaybefore dropping 4% Friday.

Kevin K. Reevey, an analyst atBankAtlantic Bancorp’s Ryan Beck& Co. Inc., said he advised peopleto sell after the company reachedits new high.

PrivateBancorp has shown it cansuccessfully expand into new mar-kets, so there is no reason to worrythat it will struggle integratingPiedmont, Mr. Reevey said.

But, he said, “We’re just tellinginvestors that while the stock hashad a great run, it’s just very richhere.”

Mr. Mandell, who was reachedwhile on vacation, said he was notconcerned about the selling onFriday.

“That is going to happen whenyou outperform the market,” hesaid. “Certain people are going tosay, ‘Hey, take some profit.’ ”

PrivateBancorp’s stock wastrading at $45.25 late Monday. ■

Mandell: His company will acquirein Arizona and Florida “for sure.”

Fla. Antipoverty EffortDraws Some Big Backers■■ BY KATIE KUEHNER-HEBERT

Five banks in Florida are puttingup $385,000 to help fund an ambi-tious effort to create for-profitcommunity development corpora-tions to redevelop poor areas.

Bank of America, Citibank,Wachovia Bank, Fifth Third Bank,and Wells Fargo Bank are con-tributing $50,000 to $150,000 eachto fund the initial stage of a 10-year program sponsored by Bran-deis University and the FloridaMinority Community Reinvest-ment Coalition. The goal of the“War on Poverty” is to stimulatemore than $300 billion of redevel-opment of lower-income neigh-borhoods throughout the state.

The first stage of the programentails “asset mapping” of poorcommunities in Florida’s fourlargest urban counties: Duval,Dade, Hillsborough, and Orange.

Asset mapping catalogs a com-munity’s resources, including theleaders and financial assets thatcould be used to form for-profitcommunity development corpora-tions. The effort will start in Octo-ber in the four counties and thenexpand to communities in sixmore counties. The total cost isestimated at $750,000.

Other investors in the programinclude Workforce Florida, a state-funded organization that haspledged $250,000, and GMAC,which has chipped in $50,000.

“This is about helping commu-nity leaders learn just how muchcapacity already exists for them tobecome self-sufficient” in redevel-oping their neighborhoods, saidThomas Shapiro, a professor of lawand social policy at Brandeis’Heller School for Social Policy and

Management in Waltham, Mass.Al Pina, the chairman of the

Florida coalition, said his groupand Brandeis will mentor the cor-porations being formed, using the$400 million-asset Telacu Commu-nity Development Corp. in LosAngeles as a model.

Founded in 1968, Telacu and itsfor-profit construction subsidiary,Telacu Industries, builds and reha-bilitates affordable housing andindustrial parks in lower-incomeneighborhoods and lends tohomebuyers and emerging busi-nesses there.

“The for-profit model is criticalto the success of community rede-velopment, because it’s really theonly way community-based orga-nizations can be self-sufficient infighting poverty,” Mr. Pina said.

He was Telacu’s vice president ofdevelopment from 1999 until lastyear, when he formed the Floridacoalition. Its 52 community orga-nizations work to increase reinvest-ment in underserved communitiesby financial institutions, insurancecompanies, governmental entities,and nonprofits — in much thesame way the Greenlining Institutein Berkeley, Calif., does.

Mr. Pina said Greenlining ishelping him form a similar coali-tion in New Jersey.

The Florida coalition chose towork with Brandeis University, hesaid, because of Prof. Shapiro’sresearch in asset mapping to helppoor communities in Illinois andMassachusetts.

Prof. Shapiro said asset-basedcommunity development — draw-ing upon the resources of poorcommunities before seeking out-side help — is becoming increas-

ingly popular throughout thecountry. Banks like it, he says,because it demonstrates the com-munities’ own financial commit-ment to redevelopment.

Greg Barnard, a spokesman forBank of America Corp.’s commu-nity development programs inWashington, said its initial $50,000contribution in Florida would bemoney well spent.

“We are trying to empower thesecommunities to develop the capac-ity” to bring the Charlotte compa-ny redevelopment deals “that wemight eventually be able tofinance,” he said.

B of A has a 10-year commit-ment to lend or invest $750 billionin underserved communitiesthroughout its markets, and sup-porting this program should helpthe company reach its goal in Flori-da, Mr. Barnard said.

Barbara L. Romani, a communi-ty relations director for Citibank inDoral, Fla., said that asset mappinglower-income communities couldreveal “diamonds in the rough,”such as budding export/importbusinesses. The newly formedcommunity development corpora-tions — with the support of banks— could then foster the growth ofthese companies and help spawnrelated businesses around them.

Mr. Pina said that other Floridabanks have said they would consid-er making loans to any of the cor-porations formed to satisfy Com-munity Reinvestment Act respon-sibilities.

Mr. Pina said it would be twoyears before the community devel-opment corporations apply forbank loans and investments to helpredevelop their neighborhoods. ■

IN BRIEF

Cadence: No Delay on SeasonsCadence Financial Corp. in Starkville, Miss., said

Monday that it does not expect the sudden departureof Seasons Bancshares Inc.’s president to delay theclosing of its deal to buy the Blairsville, Ga., company.

David K. George, 50, left the $81 million-asset Sea-sons on July 31, Cadence said last week in a filingwith the Securities and Exchange Commission. Thefiling did not explain his departure.

The deal, announced March 21 and scheduled toclose in the fourth quarter, required Mr. George tostay on as a Cadence employee.

Nevertheless, “we intend to continue to pushtoward that fourth-quarter closure and evaluate thesituation as we go forward,” Richard T. Haston, the$1.5 billion-asset Cadence’s chief financial officer,said Monday in an interview.

William L. Sutton, Seasons’ chief executive officer,has become its interim president. He said he does notanticipate the resignation to delay the closing.

With every agreement, “from the time you sign itto the time it is finished, there’s always a few rapids,”he said Monday in an interview.

Mr. George is subject to a one-year noncompeti-tive agreement. — Luke Mullins

Maine’s Northeast Profits DownNortheast Bancorp in Lewiston, Maine, said Mon-

day that earnings in its fiscal fourth quarter, whichended June 30, slipped about 1.4% from a year earli-er, to just over $1 million.

For its fiscal year, net income was flat, at $4 million.The $563 million-asset company attributed the

slight drop in quarterly earnings to costs associatedwith the construction of a new headquarters andoperations center, a lower net interest margin, andreduced loan volume.

Noninterest expenses rose 11%, to $4.7 million, andinterest expenses jumped 23%, to $4.6 million. Netinterest income fell 11%, to $4.3 million. — Alan Kline



6 TUESDAY, AUGUST 8, 2006 I N D U S T R Y S N A P S H O T AMERICAN BANKER

Credit Unions with the Most AssetsOn March 31, 2006. Dollars in thousands

©2006 American Banker Source: SNL Financial, Charlottesville, Va. (www.snl.com)

March 31 Year earlier Change March 31 Year earlier Change

1 Navy Federal Credit Union Vienna, Va. $25,443,179 $24,206,667 5.1%2 State Employees Credit Union Raleigh 13,490,330 12,582,205 7.2 3 Pentagon Federal Credit Union Alexandria, Va. 8,707,149 7,494,435 16.2 4 Boeing Employees Credit Union Tukwila, Wash. 6,481,057 5,352,204 21.1 5 Orange County Teachers Federal Credit Union Santa Ana, Calif. 6,240,216 5,457,258 14.3 6 Golden 1 Credit Union Sacramento 6,013,757 5,596,012 7.5 7 Suncoast Schools Federal Credit Union Tampa 5,168,195 4,657,989 11.0 8 Alliant Credit Union Chicago 4,371,785 4,429,085 -1.3 9 American Airlines Federal Credit Union Fort Worth 3,948,627 4,016,375 -1.7

10 Security Service Federal Credit Union San Antonio 3,869,271 3,640,159 6.3 11 Patelco Credit Union San Francisco 3,868,587 3,638,324 6.3 12 America First Federal Credit Union Ogden, Utah 3,437,968 2,996,917 14.7 13 Wescom Credit Union Pasadena, Calif. 3,423,753 3,034,127 12.8 14 San Diego County Credit Union San Diego 3,377,214 2,853,036 18.4 15 Kinecta Federal Credit Union Manhattan Beach, Calif. 3,302,184 2,816,099 17.3 16 Star One Credit Union Sunnyvale, Calif. 3,105,740 2,902,196 7.0 17 Digital Federal Credit Union Marlborough, Mass. 3,102,304 2,739,412 13.2 18 VyStar Credit Union Jacksonville, Fla. 3,077,654 2,921,175 5.4 19 Citizens Equity First Credit Union Peoria, Ill. 3,017,277 2,884,604 4.6 20 ESL Federal Credit Union Rochester, N.Y. 2,798,923 2,692,405 4.0 21 Alaska USA Federal Credit Union Anchorage 2,789,363 2,531,890 10.2 22 Desert Schools Federal Credit Union Phoenix 2,693,323 2,319,860 16.1 23 Delta Community Credit Union Atlanta 2,474,111 2,629,037 -5.9 24 Randolph-Brooks Federal Credit Union Live Oak, Tex. 2,445,989 2,271,982 7.7 25 Pennsylvania State Employees Credit Union Harrisburg 2,373,654 2,288,934 3.7 26 Bethpage Federal Credit Union N.Y. 2,311,800 2,047,855 12.9 27 United Nations Federal Credit Union New York 2,291,703 2,151,987 6.5 28 OnPoint Community Credit Union Portland, Ore. 2,257,291 1,925,403 17.2 29 Lockheed Federal Credit Union Burbank, Calif. 2,236,164 2,079,154 7.6 30 Police and Fire Federal Credit Union Philadelphia 2,195,183 2,012,110 9.1 31 GTE Federal Credit Union Tampa 2,133,843 1,989,956 7.2 32 Teachers Federal Credit Union Farmingville, N.Y. 2,093,751 1,995,473 4.9 33 Bank Fund Staff Federal Credit Union Washington 2,070,148 1,917,167 8.0 34 Eastern Financial Florida Credit Union Miramar, Fla. 2,013,697 1,847,032 9.0 35 Hudson Valley Federal Credit Union Poughkeepsie, N.Y. 1,972,776 1,931,796 2.1 36 Mission Federal Credit Union San Diego 1,965,539 1,881,250 4.5 37 San Antonio Federal Credit Union 1,918,191 1,776,597 8.0 38 ENT Federal Credit Union Colorado Springs 1,909,674 1,787,901 6.8 39 Redstone Federal Credit Union Huntsville, Ala. 1,880,071 1,771,262 6.1 40 Addison Avenue Federal Credit Union Palo Alto, Calif. 1,877,789 1,685,955 11.4 41 Mountain America Federal Credit Union West Jordan, Utah 1,823,971 1,514,961 20.4 42 Dearborn Federal Credit Union Financial Mich. 1,808,610 1,728,560 4.6 43 Visions Federal Credit Union Endicott, N.Y. 1,664,686 1,603,580 3.8 44 MacDill Federal Credit Union Tampa 1,659,955 1,603,675 3.5 45 Eastman Credit Union Kingsport, Tenn. 1,632,411 1,448,762 12.7 46 Texans Credit Union Richardson 1,625,023 1,433,073 13.4 47 BellCo Credit Union Greenwood Village, Colo. 1,609,323 1,591,621 1.1 48 Kern Schools Federal Credit Union Bakersfield, Calif. 1,602,327 1,466,506 9.3 49 Coastal Federal Credit Union Raleigh 1,581,151 1,545,397 2.3 50 Travis Credit Union Vacaville, Calif. 1,579,672 1,443,847 9.4 51 State Employees Credit Union of Maryland Linthicum 1,565,694 1,486,426 5.3 52 Tower Federal Credit Union Laurel, Md. 1,561,979 1,525,237 2.4 53 Northwest Federal Credit Union Herndon, Va. 1,556,567 1,383,936 12.5 54 Teachers Credit Union South Bend, Ind. 1,538,757 1,416,262 8.6 55 Arizona Federal Credit Union Phoenix 1,535,375 1,313,780 16.9 56 North Island Financial Credit Union San Diego 1,510,776 1,463,305 3.2 57 Credit Union of Texas Dallas 1,510,703 1,517,875 -0.5 58 First Technology Credit Union Beaverton, Ore. 1,506,534 1,456,953 3.4 59 Wings Financial Federal Credit Union Apple Valley, Minn. 1,506,413 1,472,333 2.3 60 Community America Credit Union Lenexa, Kan. 1,498,682 1,481,734 1.1 61 Atlanta Postal Credit Union 1,481,228 1,491,205 -0.7 62 Keesler Federal Credit Union Biloxi, Miss. 1,468,687 1,061,290 38.4 63 Tinker Federal Credit Union Oklahoma City 1,429,046 1,332,219 7.3 64 Provident Credit Union Redwood City, Calif. 1,406,765 1,271,073 10.7 65 Space Coast Credit Union Melbourne, Fla. 1,393,793 1,332,207 4.6 66 Redwood Credit Union Santa Rosa, Calif. 1,393,391 1,157,172 20.4 67 Affinity Federal Credit Union Basking Ridge, N.J. 1,384,154 1,331,183 4.0 68 Educational Employees Credit Union Fresno 1,354,003 1,249,241 8.4 69 Apco Employees Credit Union Birmingham, Ala. 1,343,950 1,281,481 4.9 70 Harbor One Credit Union Brockton, Mass. 1,343,732 1,202,421 11.8 71 Virginia Credit Union, Inc. Richmond 1,340,391 1,254,919 6.8 72 State Employees Federal Credit Union Albany, N.Y. 1,305,875 1,250,961 4.4 73 Municipal Credit Union New York 1,285,459 1,259,781 2.0 74 SAFE Credit Union North Highlands, Calif. 1,284,359 1,242,033 3.4 75 Michigan State University Federal Credit Union East Lansing 1,282,417 1,204,318 6.5

76 Fairwinds Credit Union Orlando $1,269,814 $1,109,097 14.5% 77 Schools Financial Credit Union Sacramento 1,242,255 1,099,148 13.0 78 Technology Credit Union San Jose 1,227,459 1,103,250 11.3 79 South Carolina Federal Credit Union North Charleston 1,213,652 1,056,411 14.9 80 Think Federal Credit Union Rochester, Minn. 1,208,189 1,161,675 4.0 81 Lake Michigan Credit Union Grand Rapids 1,205,079 1,173,442 2.7 82 Premier America Credit Union Chatsworth, Calif. 1,195,984 1,024,108 16.8 83 Members First Federal Credit Union Mechanicsburg, Pa. 1,186,652 1,062,254 11.7 84 G.E Credit Union El Paso 1,181,539 1,065,099 10.9 85 Western Federal Credit Union Manhattan Beach, Calif. 1,180,614 1,050,188 12.4 86 Founders Federal Credit Union Lancaster, S.C. 1,145,347 1,059,468 8.1 87 Langley Federal Credit Union Newport News, Va. 1,143,961 1,096,440 4.3 88 Washington State Employees Credit Union Olympia 1,130,944 1,079,581 4.8 89 Veridian Credit Union Waterloo, Iowa 1,116,993 1,043,231 7.1 90 Allegacy Federal Credit Union Winston-Salem, N.C. 1,113,198 1,073,149 3.7 91 California Credit Union Glendale 1,112,826 1,007,099 10.5 92 First Community Credit Union Chesterfield, Mo. 1,112,666 1,063,646 4.6 93 Chartway Federal Credit Union Virginia Beach, Va. 1,109,721 1,020,927 8.7 94 Wright-Patt Credit Union Fairborn Ohio 1,100,937 1,047,216 5.1 95 Truliant Federal Credit Union Winston-Salem, N.C. 1,083,312 1,004,972 7.8 96 Merck Employees Federal Credit Union Rahway, N.J. 1,072,776 1,109,203 -3.3 97 Community First Credit Union of Florida Jacksonville 1,065,350 873,489 22.0 98 Baxter Credit Union Vernon Hills, Ill. 1,061,861 1,001,948 6.0 99 Pacific Service Credit Union Walnut Creek, Calif. 1,058,982 1,017,114 4.1

100 Citadel Federal Credit Union Thorndale, Pa. 1,050,634 1,024,351 2.6 101 Central Florida Educators Federal Credit Union Orlando 1,049,788 914,099 14.8 102 Polish and Slavic Federal Credit Union Brooklyn, N.Y. 1,047,409 1,018,733 2.8 103 Meriwest Credit Union San Jose 1,043,082 948,496 10.0 104 Service Credit Union Portsmouth, N.H. 1,037,967 964,120 7.7 105 Texas Dow Employees Credit Union Lake Jackson 1,037,269 890,531 16.5 106 Georgia Telco Credit Union Atlanta 1,036,202 1,019,627 1.6 107 Affinity Plus Federal Credit Union St. Paul 1,026,794 957,888 7.2 108 AEDC Federal Credit Union Tullahoma, Tenn. 1,014,391 978,225 3.7 109 Landmark Credit Union Waukesha, Wis. 1,010,809 931,842 8.5 110 Dow Chemical Employees Credit Union Midland, Mich. 1,007,685 983,984 2.4 111 Credit Union Central Falls Smithfield, R.I. 1,004,769 966,216 4.0 112 Nassau Educators Federal Credit Union Westbury, N.Y. 999,376 932,161 7.2 113 Connecticut State Employees Credit Union Hartford 995,412 1,077,762 -7.6 114 Arrowhead Central Credit Union San Bernardino, Calif. 993,542 907,165 9.5 115 Sandia Laboratory Federal Credit Union Albuquerque 988,402 935,671 5.6 116 MidFlorida Schools Federal Credit Union Lakeland 987,396 822,367 20.1 117 Robins Federal Credit Union Warner Robins, Ga. 983,092 889,725 10.5 118 Indiana Members Credit Union Indianapolis 982,582 902,473 8.9 119 Forum Credit Union Fishers, Ind. 979,279 864,419 13.3 120 Eglin Federal Credit Union Fort Walton Beach, Fla. 975,336 934,230 4.4 121 Arizona State Savings and Credit Union Phoenix 973,975 960,258 1.4 122 Newport News Shipbuilding Credit Union Va. 954,443 861,033 10.8 123 LBS Financial Credit Union Long Beach, Calif. 954,022 846,120 12.8 124 California Coast Credit Union San Diego 927,845 844,546 9.9 125 ORNL Federal Credit Union Oak Ridge, Tenn. 927,659 795,256 16.6 126 Chevron Federal Credit Union Oakland, Calif. 909,238 875,692 3.8 127 First Future Credit Union San Diego 886,206 791,116 12.0 128 American Eagle Federal Credit Union East Hartford, Conn. 885,060 799,613 10.7 129 Nevada Federal Credit Union Las Vegas 861,946 816,280 5.6 130 State Department Federal Credit Union Alexandria, Va. 860,407 803,972 7.0 131 University of Wisconsin Credit Union Madison 850,917 752,906 13.0 132 Greylock Federal Credit Union Pittsfield, Mass. 848,220 813,408 4.3 133 Apple Federal Credit Union Fairfax, Va. 842,825 746,075 13.0 134 Anheuser-Busch Employees Credit Union St. Louis 839,836 705,535 19.0 135 Rockland Federal Credit Union Mass. 836,443 769,343 8.7 136 DM Federal Credit Union Tucson 831,162 781,144 6.4 137 Orange County's Credit Union Santa Ana, Calif. 826,406 783,381 5.5 138 Spokane Teachers Credit Union 822,529 724,731 13.5 139 Associated Credit Union Norcross, Ga. 821,364 829,416 -1.0 140 TruMark Financial Credit Union Trevose, Pa. 817,369 773,036 5.7 141 Silver State Schools Family Credit Union Las Vegas 816,229 736,382 10.8 142 Community First Credit Union Appleton, Wis. 813,379 695,461 17.0 143 Evangelical Christian Credit Union Brea, Calif. 813,271 685,800 18.6 144 Hawaii State Federal Credit Union Honolulu 808,049 762,483 6.0 145 F&A Federal Credit Union Monterey Park, Calif. 805,367 775,580 3.8 146 Xerox Federal Credit Union El Segundo, Calif. 802,238 752,354 6.6 147 Credit Union One Ferndale, Mich. 789,117 719,499 9.7 148 J.S.C. Federal Credit Union Houston 787,645 709,850 11.0 149 Pawtucket Credit Union R.I. 786,021 766,412 2.6 150 Oregon Community Credit Union Eugene 784,168 718,408 9.2


AMERICAN BANKER I N D U S T R Y S N A P S H O T TUESDAY, AUGUST 8, 2006 7

1 Navy Federal Credit Union Vienna, Va. $19,551,279 $18,495,712 5.7%2 State Employees Credit Union Raleigh 12,339,670 11,501,001 7.3 3 Pentagon Federal Credit Union Alexandria, Va. 7,720,982 6,607,410 16.9 4 Boeing Employees Credit Union Tukwila, Wash. 5,665,675 4,709,436 20.3 5 Golden 1 Credit Union Sacramento 5,353,529 5,003,505 7.0 6 Orange County Teachers Federal Credit Union Santa Ana, Calif. 5,244,543 4,527,236 15.8 7 Suncoast Schools Federal Credit Union Tampa 4,566,828 4,118,052 10.9 8 Alliant Credit Union Chicago 3,723,652 3,766,801 -1.1 9 American Airlines Federal Credit Union Fort Worth 3,508,976 3,604,011 -2.6

10 Patelco Credit Union San Francisco 3,304,128 3,163,267 4.5 11 Security Service Federal Credit Union San Antonio 3,116,692 3,095,123 0.7 12 America First Federal Credit Union Ogden, Utah 3,053,915 2,662,832 14.7 13 San Diego County Credit Union San Diego 2,917,512 2,506,277 16.4 14 Digital Federal Credit Union Marlborough, Mass. 2,838,122 2,529,606 12.2 15 Kinecta Federal Credit Union Manhattan Beach, Calif. 2,684,299 2,503,481 7.2 16 VyStar Credit Union Jacksonville, Fla. 2,660,106 2,540,247 4.7 17 Citizens Equity First Credit Union Peoria, Ill. 2,657,507 2,549,892 4.2 18 Star One Credit Union Sunnyvale, Calif. 2,599,575 2,423,516 7.3 19 Wescom Credit Union Pasadena, Calif. 2,450,395 2,242,666 9.3 20 Alaska USA Federal Credit Union Anchorage 2,372,122 2,270,295 4.5 21 Desert Schools Federal Credit Union Phoenix 2,327,305 1,999,224 16.4 22 Pennsylvania State Employees Credit Union Harrisburg 2,133,434 2,065,706 3.3 23 Bethpage Federal Credit Union N.Y. 2,087,149 1,832,061 13.9 24 Delta Community Credit Union Atlanta 2,066,344 2,277,494 -9.3 25 United Nations Federal Credit Union New York 2,046,362 1,931,420 6.0 26 OnPoint Community Credit Union Portland, Ore. 2,008,491 1,672,632 20.1 27 Randolph-Brooks Federal Credit Union Live Oak, Tex. 1,988,022 1,824,070 9.0 28 ESL Federal Credit Union Rochester, N.Y. 1,894,771 1,772,731 6.9 29 Lockheed Federal Credit Union Burbank, Calif. 1,872,555 1,760,421 6.4 30 Police and Fire Federal Credit Union Philadelphia 1,855,645 1,695,658 9.4 31 Teachers Federal Credit Union Farmingville, N.Y. 1,835,304 1,762,645 4.1 32 GTE Federal Credit Union Tampa 1,785,626 1,813,155 -1.5 33 Hudson Valley Federal Credit Union Poughkeepsie, N.Y. 1,752,086 1,738,860 0.8 34 Bank Fund Staff Federal Credit Union Washington 1,738,540 1,614,176 7.7 35 ENT Federal Credit Union Colorado Springs 1,674,035 1,575,238 6.3 36 Mountain America Federal Credit Union West Jordan, Utah 1,656,833 1,374,088 20.6 37 Redstone Federal Credit Union Huntsville, Ala. 1,656,253 1,568,042 5.6 38 Mission Federal Credit Union San Diego 1,647,796 1,582,802 4.1 39 Addison Avenue Federal Credit Union Palo Alto, Calif. 1,626,215 1,487,264 9.3 40 MacDill Federal Credit Union Tampa 1,497,191 1,455,603 2.9 41 Eastern Financial Florida Credit Union Miramar, Fla. 1,491,442 1,300,820 14.7 42 Kern Schools Federal Credit Union Bakersfield, Calif. 1,432,121 1,324,029 8.2 43 Visions Federal Credit Union Endicott, N.Y. 1,425,957 1,382,384 3.2 44 Dearborn Federal Credit Union Financial Mich. 1,411,119 1,311,263 7.6 45 Travis Credit Union Vacaville, Calif. 1,392,676 1,270,662 9.6 46 Northwest Federal Credit Union Herndon, Va. 1,382,353 1,232,641 12.1 47 State Employees Credit Union of Maryland Inc. Linthicum 1,373,655 1,314,087 4.5 48 Tower Federal Credit Union Laurel, Md. 1,340,036 1,325,699 1.1 49 Eastman Credit Union Kingsport, Tenn. 1,334,661 1,164,448 14.6 50 Wings Financial Federal Credit Union Apple Valley, Minn. 1,327,797 1,303,907 1.8 51 Texans Credit Union Richardson 1,311,635 1,210,312 8.4 52 Keesler Federal Credit Union Biloxi, Miss. 1,306,664 932,636 40.1 53 Coastal Federal Credit Union Raleigh 1,298,326 1,246,715 4.1 54 Atlanta Postal Credit Union 1,289,432 1,309,081 -1.5 55 Tinker Federal Credit Union Oklahoma City 1,277,689 1,189,400 7.4 56 BellCo. Credit Union Greenwood Village, Colo. 1,276,818 1,263,505 1.1 57 Redwood Credit Union Santa Rosa, Calif. 1,275,392 1,053,917 21.0 58 San Antonio Federal Credit Union 1,274,235 1,177,038 8.3 59 Arizona Federal Credit Union Phoenix 1,251,688 1,045,434 19.7 60 Affinity Federal Credit Union Basking Ridge, N.J. 1,250,769 1,201,132 4.1 61 Teachers Credit Union South Bend, Ind. 1,250,412 1,163,233 7.5 62 Credit Union of Texas Dallas 1,250,263 1,297,587 -3.6 63 Apco Employees Credit Union Birmingham, Ala. 1,222,262 1,167,007 4.7 64 Educational Employees Credit Union Fresno 1,211,594 1,124,015 7.8 65 Virginia Credit Union Inc. Richmond 1,207,760 1,134,684 6.4 66 First Technology Credit Union Beaverton, Ore. 1,204,285 1,178,990 2.1 67 Space Coast Credit Union Melbourne, Fla. 1,194,527 1,165,631 2.5 68 State Employees Federal Credit Union Albany, N.Y. 1,178,950 1,135,417 3.8 69 North Island Financial Credit Union San Diego 1,149,167 1,094,527 5.0 70 SAFE Credit Union North Highlands, Calif. 1,123,868 1,091,838 2.9 71 Schools Financial Credit Union Sacramento 1,120,168 991,505 13.0 72 Municipal Credit Union New York 1,118,860 1,110,048 0.8 73 Fairwinds Credit Union Orlando 1,115,965 976,848 14.2 74 Provident Credit Union Redwood City, Calif. 1,110,471 1,049,122 5.8 75 Technology Credit Union San Jose 1,078,228 963,904 11.9

76 Michigan State University Federal Credit Union East Lansing $1,075,118 $1,010,124 6.4%77 Members First Federal Credit Union Mechanicsburg, Pa. 1,074,347 967,069 11.1 78 G.E. Credit Union El Paso 1,067,848 965,882 10.6 79 Community America Credit Union Lenexa, Kan. 1,058,811 1,117,208 -5.2 80 Western Federal Credit Union Manhattan Beach, Calif. 1,041,820 917,845 13.5 81 Chartway Federal Credit Union Virginia Beach 1,028,891 929,016 10.8 82 Premier America Credit Union Chatsworth, Calif. 1,020,870 888,797 14.9 83 Lake Michigan Credit Union Grand Rapids, Mich. 1,016,327 989,456 2.7 84 Washington State Employees Credit Union Olympia 999,713 955,690 4.6 85 Veridian Credit Union Waterloo, Iowa 993,861 926,505 7.3 86 Langley Federal Credit Union Newport News, Va. 993,150 951,714 4.4 87 South Carolina Federal Credit Union North Charleston 985,592 897,751 9.8 88 Founders Federal Credit Union Lancaster, S.C. 981,151 913,527 7.4 89 Allegacy Federal Credit Union Winston-Salem, N.C. 975,141 935,156 4.3 90 First Community Credit Union Chesterfield, Mo. 966,931 955,498 1.2 91 Wright-Patt Credit Union Fairborn, Ohio 963,793 919,205 4.9 92 Community First Credit Union of Florida Jacksonville 957,860 780,206 22.8 93 Merck Employees Federal Credit Union Rahway, N.J. 946,401 992,343 -4.6 94 California Credit Union Glendale 940,879 864,929 8.8 95 Truliant Federal Credit Union Winston-Salem, N.C. 939,565 877,263 7.1 96 Think Federal Credit Union Rochester, Minn. 921,653 891,227 3.4 97 Polish and Slavic Federal Credit Union Brooklyn, N.Y. 919,719 892,852 3.0 98 Pacific Service Credit Union Walnut Creek, Calif. 916,091 888,288 3.1 99 Arrowhead Central Credit Union San Bernardino, Calif. 910,704 835,079 9.1

100 Affinity Plus Federal Credit Union St. Paul 906,170 872,786 3.8 101 Connecticut State Employees Credit Union Hartford 900,206 979,314 -8.1 102 Harbor One Credit Union Brockton, Mass. 898,649 800,166 12.3 103 Citadel Federal Credit Union Thorndale, Pa. 884,918 867,053 2.1 104 Arizona State Savings and Credit Union Phoenix 884,503 880,183 0.5 105 Baxter Credit Union Vernon Hills, Ill. 882,797 844,742 4.5 106 Sandia Laboratory Federal Credit Union Albuquerque 875,299 830,728 5.4 107 Nassau Educators Federal Credit Union Westbury, N.Y. 873,193 814,798 7.2 108 Georgia Telco Credit Union Atlanta 872,459 864,813 0.9 109 Robins Federal Credit Union Warner Robins, Ga. 867,666 782,347 10.9 110 MidFlorida Schools Federal Credit Union Lakeland 867,375 718,922 20.6 111 Dow Chemical Employees Credit Union Midland, Mich. 865,805 862,533 0.4 112 Indiana Members Credit Union Indianapolis 865,201 796,368 8.6 113 Central Florida Educators Federal Credit Union Orlando 863,052 785,154 9.9 114 Landmark Credit Union Waukesha, Wis. 860,576 789,694 9.0 115 Eglin Federal Credit Union Fort Walton Beach, Fla. 846,277 816,264 3.7 116 AEDC Federal Credit Union Tullahoma, Tenn. 844,552 821,586 2.8 117 Meriwest Credit Union San Jose 839,669 768,131 9.3 118 California Coast Credit Union San Diego 823,627 762,454 8.0 119 LBS Financial Credit Union Long Beach, Calif. 813,105 745,571 9.1 120 Credit Union Central Falls Smithfield, R.I. 812,693 793,480 2.4 121 Texas Dow Employees Credit Union Lake Jackson, Tex. 810,444 795,221 1.9 122 First Future Credit Union San Diego 790,593 700,792 12.8 123 State Department Federal Credit Union Alexandria, Va. 788,341 741,038 6.4 124 American Eagle Federal Credit Union East Hartford, Conn. 783,976 704,107 11.3 125 ORNL Federal Credit Union Oak Ridge, Tenn. 781,279 662,158 18.0 126 Chevron Federal Credit Union Oakland, Calif. 777,442 747,136 4.1 127 Nevada Federal Credit Union Las Vegas 770,622 734,800 4.9 128 Service Credit Union Portsmouth, N.H. 765,907 717,452 6.8 129 Newport News Shipbuilding Credit Union Va. 744,504 733,937 1.4 130 Community First Credit Union Appleton, Wis. 736,206 625,754 17.7 131 University of Wisconsin Credit Union Madison 735,480 651,045 13.0 132 TruMark Financial Credit Union Trevose, Pa. 735,151 698,862 5.2 133 Orange County's Credit Union Santa Ana, Calif. 730,719 694,285 5.2 134 DM Federal Credit Union Tucson 730,221 680,330 7.3 135 Anheuser-Busch Employees Credit Union St. Louis 727,334 600,003 21.2 136 Silver State Schools Family Credit Union Las Vegas 707,118 635,756 11.2 137 Altura Credit Union Riverside, Calif. 706,314 581,041 21.6 138 Associated Credit Union Norcross, Ga. 702,776 719,266 -2.3 139 Caltech Employees Federal Credit Union La Canada Flintridge, Calif. 697,140 665,039 4.8 140 Hawaii State Federal Credit Union Honolulu 696,997 659,664 5.7 141 Apple Federal Credit Union Fairfax, Va. 694,754 633,175 9.7 142 J.S.C. Federal Credit Union Houston 693,361 626,735 10.6 143 Oregon Community Credit Union Eugene 686,296 623,258 10.1 144 Educators Credit Union Racine, Wis. 682,467 650,481 4.9 145 Rockland Federal Credit Union Mass. 682,296 632,152 7.9 146 Credit Union One Ferndale, Mich. 681,427 624,808 9.1 147 Spokane Teachers Credit Union 679,851 596,576 14.0 148 F&A Federal Credit Union Monterey Park, Calif. 676,957 630,380 7.4 149 TruWest Credit Union Scottsdale, Ariz. 676,557 608,623 11.2 150 HawaiiUSA Federal Credit Union Honolulu 675,738 652,605 3.5

Credit Unions with the Most DepositsOn March 31, 2006. Dollars in thousands

©2006 American Banker Source: SNL Financial, Charlottesville, Va. (www.snl.com)

March 31 Year earlier Change March 31 Year earlier Change


AMERICAN BANKER C A R D S TUESDAY, AUGUST 8, 2006 9

Pulse Touts Its FreedomFrom Merchant Conflicts■■ BY DAVID BREITKOPF

For years Pulse EFT Associa-tion argued that its status as abank-owned PIN debit networkmade it more attuned to banks’needs than networks that had toanswer to shareholders.

That argument has beenuntenable since January of lastyear, when Morgan Stanley’sDiscover Financial Services LLCbought the Houston network.Now, Pulse’s president, DavidSchneider, is emphasizinganother difference between hisnetwork and others: It is notowned by a company that alsodoes merchant processing, so itavoids pricing conflicts of inter-est between banks and mer-chants.

“Fundamentally, what the net-work has to decide is who payswhat to whom,” Mr. Schneidersaid in an interview last month.

Marshall & Ilsley Corp.’sMetavante Corp. own the PINdebit networks NYCE, First DataCorp. owns Star, and Fiserv Inc.owns Accel/Exchange. At thesecompanies, one unit contractswith banks for debit networkservices, while another contractswith merchants to process trans-actions at the point of sale.

Mr. Schneider did not use hisrivals’ names, but he said such asetup creates an inherent tensionwhen it comes to setting inter-change levels.

“When you are in the businessof providing merchant process-ing, and you have to deal withmerchants, many of those issuesthat merchants are concernedabout create problems from anetwork perspective, whenyou’re trying to also manage theinterests of financial institutionsin the role of issuing cards, andviewing these products assources of revenue,” he said.

First Data, Fiserv, and Meta-vante would not discuss Mr.Schneider’s remarks.

Of course, Discover is knownas the most merchant-friendly ofthe four major credit card net-works, because its fees are thelowest. But Mr. Schneider saidDiscover keeps Pulse on a longleash.

“We certainly look for ways towork collaboratively with Dis-cover to bring new products tothe market,” Mr. Schneider said.“But at the same time, Discovermade a commitment at the timethey acquired Pulse that wewould remain independent.”

For most of its 25 years Pulse,

which caters to small and mid-size institutions, focused on itshome state of Texas. But in thelast few years competition in thedebit market has been fierce, andthe notion of a regional networkhas pretty much been laid to restwith networks bidding forbanks’ business anywhere theymight be.

For example, Pulse, now hasbank issuers in the Southeast(BankAtlantic Bancorp Inc. inFort Lauderdale, Fla.), theNortheast (Fulton FinancialCorp. in Lancaster, Pa.), and theWest (Silver State Bank in LasVegas and Oak Valley Communi-ty Bank of Oakdale, Calif.).

Also, even though there arestill thousands of small and mid-size institutions, consolidationin the banking industry has left ahandful of megabanks in controlof millions of cardholders. Mr.Schneider said he expects thatconsolidation to taper off, forregulatory and other reasons.“There’s only so much you canbuy.”

Pulse works with some largebanking companies, such as U.S.Bancorp, JPMorgan Chase &Co., Bank of America Corp., andWells Fargo & Co.

Tim Sloane, the director fordebit advisory services at Merca-tor Advisory Group Inc. ofWaltham, Mass., said thatthough PIN debit is still growingrapidly, the networks need tofigure out how to participate inemerging markets like Internetpayments.

He also noted that VisaU.S.A. and MasterCard Inc.have been siphoning off somelow-value PIN debit transac-tions with innovations such assignatureless transactions andcontactless cards.

“Today those markets aresmall, but they’re growing fast,”he said. “I think Pulse, like all theother EFT network operators,need to figure out how they’regoing to take PIN debit andextend it into these new environ-ments. They don’t have to do ittoday or this year, but they haveto do it pretty soon.”

Mr. Schneider said he did notsee contactless transactions as athreat to PIN debit, because theterminal captures the sameinformation whether through aswipe or a wave. In fact, Pulsehas developed standards for con-tactless PIN debit, and it hastalked with banks about contact-less technology.

“We believed that the samefundamental drivers that makePIN debit attractive in a cardswipe environment are alsogoing to be present in a contact-less environment,” he said.

Signatureless transactions,where no authentication is need-ed for purchases under $25, is a“business decision” on the mer-chant’s part to help speed cus-tomers through the checkoutlines, Mr. Schneider said. Butthis likely would not be a majorcompetitive advantage, “becausekeying in your PIN doesn’t takea lot of time.”

He agreed that PIN debit hasnot penetrated the Internet, eventhough Pulse and the other EFTnetworks have various options,but he said that moving PINdebit to the Internet requirescare, because of the fraud risk.

“I think a lot of people wouldargue that it would have been alittle more helpful if morethought had been given to therollout of card acceptance intothe Internet in the first place,” hesaid.

“Not really thinking hardabout those security issues, andjust pushing for acceptance,which drives transaction volume… resulted in a lot of unhappyconsumers, a lot of unhappymerchants, a lot of fraud lossesthat ended up being eaten byissuers and merchants.”

Worse, online fraud “hasfrankly created concerns aboutconsumers’ overall feelings andconfidence of the payment sys-tem,” Mr. Schneider said. “We’redefinitely interested in avoidingthe mistakes that we think havebeen made in the past, in termsof extending payments into theInternet, and we’re going to do itthe right way.” ■

Schneider: “What the network has todecide is who pays what to whom.”

IN BRIEF

Elan to Buy Most of City Holding’s PortfolioCity Holding Co. agreed to sell most of its credit card portfolio to

Elan Financial Services, a subsidiary of U.S. Bancorp of Minneapolis.The $2.5 billion Charleston, W.Va., bank holding company said

Monday that Elan would buy $11.5 million of its $14 million portfo-lio at a premium of 29.6%, or $3.4 million.

City Holding also said it would provide credit card services to Elan’sretail customers.

Albert Savastano, an analyst with Janney Montgomery Scott LLC,wrote in a research report issued Monday that City Holding has beenshifting away from unsecured lending for the past several years, tofocus instead on real estate loans.

“City Holding was letting the credit card portfolio run off, and thismove accelerates that decision. Post sale, we estimate over 95% of theportfolio will be secured by real estate,” he wrote.

In a press release, Craig Stillwell, City Holding’s executive vice pres-ident, called the agreement an opportunity to expand the company’scustomer base in a tough credit card market.

“It has been difficult to grow credit card balances in recent years asthe industry has experienced significant consolidation and manybanks have elected to get out of the business,” he said.— H. Michael Jalili

Visa Posts Small-Business Spending SurgeSpending on Visa U.S.A.’s small-business cards in the 12 months

that ended June 30 rose 32.2% over the previous 12 months, to $103.5billion, the San Francisco card association said.

Many small businesses are shifting their payments from cash andchecks to cards, and Visa said Monday that small businesses are dri-ving the growth in its commercial solutions unit.

Visa divides the commercial market into three segments: smallbusinesses; large and middle-market corporations; and governmentagencies. Visa Business-branded cards are for companies with annualrevenue of up to $25 million.

“Small-business owners desire a secure, reliable payment solutionwhich will empower them to better control and more efficiently man-age their businesses,” Raghav Lal, a Visa senior vice president, said ina press release. — H. Michael Jalili

TRM’s Loss Grows on Decline in ATM UseTRM Corp. said a decline in the use of its automated teller

machines, an issue it is having some success addressing, hurt its sec-ond-quarter results.

The Portland, Ore., ATM deployer said last week that net salesdropped 12% from a year earlier, to $44.2 million. Its net loss tripled,to $4.5 million.

However, the number of monthly withdrawals per ATM rose 6%from the first quarter, and the total number of withdrawals increased4%. TRM also said it slowed the number of ATMs shut down orremoved from its network, to 361 in the second quarter from 941 inthe first. — Daniel Wolfe

Hypercom Cites Growth in Foreign SalesHypercom Corp. said international sales drove its second-quarter

revenue growth.The Phoenix point-of-sale technology provider said last week that

its revenue rose 10% from a year earlier, to $66.1 million. It reporteda net profit of $6.2 million, compared with a net loss of $16.7 million.

Hypercom increased sales in Brazil, Mexico, and some central Euro-pean markets.

The company said several recently announced reseller and othermarketing agreements are meant to expand its sales worldwide. Some,such as those with Symbol Technologies Inc. and Wincor Nixdorf Inc.,will go into effect first in the United States and then internationally.Others focus on specific markets, such as Portugal and South Africa.

— Daniel Wolfe

BankAtlantic, Royal Caribbean in ATM DealBankAtlantic Bancorp Inc. has installed its automated teller

machines on Royal Caribbean International’s Freedom of the Seascruise ships.

The Fort Lauderdale, Fla., company announced its deal with RoyalCaribbean last week. The ATMs connect to payment networksthrough satellite communications links.BankAtlantic has had ATMs been on cruise liners since 1995. It nowhas more than 95 machines on ships operated by several companies,including Celebrity Cruises Inc., Carnival Corp., and Princess CruiseLines Ltd. — David Breitkopf


10 TUESDAY, AUGUST 8, 2006 M O R T G A G E S AMERICAN BANKER

What would you rather talk about? A nonprime partner respected

for its ethical, efficient and successful business practices?

Or why you didn’t partner with Option One in the first place?

Option One Mortgage Corporation, 3 Ada, Irvine, CA 92618, is an Arizona Mortgage Banker #BK15204. Loans made or arranged pursuant to a Department of Corporations CaliforniaFinance Lenders License; Option One Mortgage Corporation is a Georgia Residential Mortgage Licensee; is an Illinois Residential Mortgage Licensee; is a MassachusettsMortgage Lender #ML0863; is licensed by the New Hampshire Banking Department; is a licensed Mortgage Banker - NYS Banking Department; is licensed by the PennsylvaniaDepartment of Banking; is a Rhode Island Lender Licensee; is licensed by the Virginia State Corporation Commission, license number MLB-599. Not all programs available in allareas. Option One underwriting guidelines apply to all loan programs. Program restrictions apply. Programs subject to change at anytime and without advance notice.©2006 Option One Mortgage Corporation. All rights reserved. NA127

Face the music atshareholders’ meeting

Announce record profitsX

Call 888.761.4469 or visit us at www.optiononemortgage.com

Irwin Finds an AcquirerFor Origination PlatformN.J., mortgage bank FreedomMortgage Corp. is buying the plat-form. Brian Simon, a senior vicepresident at Freedom, said theacquisition should about quadru-ple its loan volume, which hadbeen on pace to reach about $3 bil-lion this year. (Irwin’s second-quarter originations of first mort-gages fell 15% from a year earlier,to about $2.2 billion.)

Freedom also said the acquisi-tion would give it the scale to pros-per in the conforming business.“It’s not a business we want to getout of,” Mr. Simon said, and theability to spread costs over morevolume will ease margin pressure.

Though it does both conform-ing and nonconforming lending,agency business is particularlyimportant to Freedom, because itsservicing operations are focusedon such loans, Mr. Simon said. It isone of the biggest privately heldagency servicers, with about $11billion of servicing rights, and “it’smuch better to originate the servic-ing than to purchase it right now.”

Freedom also would get signifi-cant sales operations in the South-east, the Southwest, and the Mid-west, as well as a platform with abigger emphasis on third-partylending, whose lower fixed costs itlikes, he said. (It has focused on theMiddle Atlantic, the Northeast, andthe West Coast.)

His company sees an opportuni-ty to add more nonconformingproducts to its “well-established setof delivery channels,” Mr. Simonsaid. Irwin Mortgage has roughly100 offices, mostly sales offices.

Irwin Financial said it expects tosell the origination platform andthe servicing rights this quarter,

but that discussions with potentialbuyers for the servicing platformwere not as far along. A spokesmansaid the servicing operation hasabout 125 employees; the origina-tion shop has about 650.

David Konrad, an analyst atKeefe, Bruyette & Woods Inc., saidhe was surprised Irwin was notplanning to sell the servicing rightsand operations together. He alsosaid that, despite the company’sother explanations for its decisionto quit the first mortgage business,the volatility of servicing rights andrelated hedging had been a bigproblem for Irwin in recent years.

Irwin also said it would probablytake another $14.3 million ofcharges related to the sale of thetwo operations, after taking a $5.7million charge in the second quar-ter. The additional charges do notreflect “any potential gain (or loss)”on the sale of the servicing assets.

Its second-quarter home equitylending plunged 58% from a yearearlier, to $211 million; the unithas lost money in several recent

quarters. Irwin recently replacedthe management of its IrwinHome Equity and shut downalmost all the unit’s retail opera-tions, eliminating 145 jobs, or 22%of the unit’s work force.

Also Monday, the San Franciscolender Transnational Financial Net-work Inc. said it had agreed to buythe mortgage division of “a largeregional bank holding company”with stock. The deal is expected toclose by mid-September.

Transnational did not name theseller, which would become one ofits largest shareholders. JosephKristul, Transnational’s CEO, saidearly Monday that he could notdiscuss the deal yet.

His company said the acquisi-tion should almost double its vol-ume. In the second quarter, it orig-inated $125 million.

The mortgage M&A market hasbeen growing hotter by the day,mostly because of companies clos-er in size to Transnational thanIrwin Mortgage.

Last week Shearson FinancialNetwork Inc. of Las Vegas said ithad bought 85% of Allstate HomeLoans Inc., an Irvine, Calif., whole-sale and retail mortgage bank thatdoes business as Allstate Fundingand originated $440 million lastyear. Shearson said the acquisition,which it valued at $5 million,should raise its annual originationsto $1 billion.

That day Cherry Creek Mort-gage Co. of Greenwood Village,Colo., said it had bought PremierMortgage Group, a Colorado retaillender that originated $725 millionlast year. Cherry Creek said theacquisition, combined with oneannounced in May, should help itsoriginations surpass $2 billion thisyear. ■

Miller: “Six months was longer thanwe had hoped” to wait for a deal.

IN BRIEF

First American of Calif. Acquires OffuttThe Santa Ana, Calif., title insurance and settlement services giant

First American Corp. said it purchased Offutt Systems Inc., a Greens-boro, N.C., provider of multiple listing service technology, last week.

First American announced the purchase Monday but did not saywhat it paid for Offutt, which serves 60 multiple listing service orga-nizations around the country, most in small or midsize real estatemarkets that First American’s Tempo and MLXchange products tradi-tionally have not reached.

About 80,000 real estate agents use Offutt’s system, and the pur-chase raised the number of agents using First American’s listing prod-ucts to 600,000.

PMI Subsidiary Promotes Actuarial ExecPMI Group Inc.’s U.S. mortgage insurance unit said it promoted

Kenneth S. Dailey to vice president of actuarial services.Mr. Dailey, whose promotion was announced Monday, works on

loss reserves — developing models, annual budgets, and strategicplans — and assists with reserves for other units.

He joined PMI, of Walnut Creek, Calif., in 2002 as a director ofactuarial services.

Thornburg Exec Cites Margin Woes on TVThornburg Mortgage Inc.’s president, Larry Goldstone, said

increased competition in the mortgage market has put pressure on hisSanta Fe, N.M., real estate investment trust’s margins.

“What we’ve seen is, as mortgage originations have come down overthe last year or two, the industry continues to have excess capacity, sothere’s a lot of competition for the smaller amount of business that thereis out there today,” Mr. Goldstone said in a CNBC interview Monday.

“That’s put a lot of pressure on profit margins, and we’re feelingsome of the effects of that,” he said. — Dow Jones

Survey: Portuguese Banks Reduce SpreadsPortuguese banks lowered the spread between the interest rate they

charge on housing loans and the benchmark Euribor rate in the secondquarter, as competition increased for one of the fastest-growing loantypes. Four of the five banks in a Bank of Portugal survey said theyreduced the spreads. One said it cut them “considerably,” the central banksaid on its Web site. Another said it “slightly” increased them.

Two cited increased competition as the reason for the lower spreads.With few opportunities for acquisitions, foreign banking companies,

including Santander Totta SGPS SA, a unit of Spain’s Santander CentralHispano SA, and Barclays PLC, are using aggressive mortgage pricing togain market share. “It’s an area that’s less risky, and it brings a client intothe bank for a number of years,” said Pedro Mendes, an analyst at BancoComercial Portugues SA in Lisbon. “Banks can make up for the smallermargins on mortgages by selling other products.”

The mortgage portfolios of Portuguese banks grew 11% in the 12months through May, compared with 6.8% for other loans to individu-als and 7.3% for loans to nonfinancial companies, the Bank of Portugalsaid in a previous report. The survey, issued last week, did not identifythe five banks it covers. Portugal’s five biggest banks are Caixa Geral deDepositos SA, Banco Comercial Portugues SA, Banco Espirito Santo SA,Santander Totta, and Banco BPI SA. — Bloomberg News



AMERICAN BANKER T E C H N O L O G Y TUESDAY, AUGUST 8, 2006 11

Harland: SoftwareOffsets Check Sales

Declining consumer check usedrove down second-quarterearnings at John H. Harland Co.but was offset by growth in theAtlanta company’s software divi-sion.

Harland, the No. 2 checkprinter after Deluxe Corp. ofShoreview, Minn., reported Fri-day that its net income fell12.1% from the same period lastyear, to $16.5 million.

Earnings per diluted share fell9%, to 61 cents, and consolidatedsales rose 8.4%, to $259.4 million.

Timothy C. Tuff, Harland’schairman and chief executive,said in a press release that thesecond-quarter results were solid“but came in at the low end ofour guidance due to lower vol-umes in checks and our tradi-tional forms business.”

Harland said sales by its print-ed products division rose 5.9%,to $159 million, but net incomefell 2.2%, to $26.5 million,because of the loss of a large cus-tomer (which the vendor did notname) and slower orders fromseveral others.

In recent years many con-sumers have decreased their useof checks and increased their useof payment cards and online billpayment services.

Sales by the software and ser-vices division climbed 18.8% to73.6 million, and net incomegrew 13.3%, to $7.6 million.

Harland has made efforts toexpand its technology businessto offset the decline in demandfor checks. For example, itacquired the core processingoutsourcer Intrieve Inc. last year.

Sales by Harland’s third divi-sion, the educational testingequipment company Scantron,fell 0.7%, to $27.1 million, thoughits net income rose 18.2%, to $6.3million, because of improvementsin its cost structure.

Harland expects to earn 57 to62 cents a share this quarter and$2.83 to $2.88 this year.

The vendor said it boughtback 717,400 of its shares in thesecond quarter at an averageprice of $42.43 each. It is autho-rized to buy back nearly 1.8 mil-lion more.

Harland’s stock price fell12.8% Friday to $39.50, andslipped again on Monday. Atmidday it was trading at $34.03,down 1.19%. — Will Wade

Deere & Co. to UseFidelity National Tool

The agricultural and commer-cial equipment maker Deere &Co. has licensed the Profile corebanking system from FidelityNational Information Services

Inc. to process its U.S. install-ment loan portfolio.

Art Woodcock, the vice presi-dent of retail lending at theMoline, Ill., manufacturer’s JohnDeere Credit, said last week in aFidelity National press releasethat his company is convertingfrom a mainframe system toFidelity’s core processing systemto support its “future growthand continued focus on cus-

tomer service.”John Deere Credit has $13.1

billion of financing receivables.James Meenagh, a spokesmanfor the unit, said the companyplans a phased rollout of theProfile system over the next 18to 24 months.

Fidelity National, which ismajority owned by FidelityNational Financial Inc. of Jack-sonville, Fla., said the licensing

deal illustrates the value thatnonbank lenders find in its coresystem offerings.

(Fidelity National plans tospin off its technology unit nextquarter.)

Hundreds of institutions in 16countries use the Profile systemfor real-time processing ofaccounts, Fidelity National Infor-mation said.

Fidelity’s Profile software uses

a single database of customeraccounts and company products,and keeps track of deposit andloan transactions, in multiplecurrencies.

Frank Sanchez, the presidentof Fidelity National Informa-tion, said in the release that, “welook forward to working withJohn Deere Credit to ensure thatit realizes the most value fromour solutions.” — Steve Bills

We process more than 1,200 transactions in a second.

He couldn’t care less about 1,199 of them.

Every one of your customers would like to believe they’re your only customer. We can help you

make them feel that way by creating rewards programs designed to fi t their specifi c needs. Or

keeping an account active while replacing a lost card. Customers notice that kind of service. We

know, because it’s helped us become one of the world’s leaders in payment processing. To learn

more about how we can serve your customers together, call 706.649.2307 or visit us at tsys.com.

Our product is service.

IN BRIEF


12 TUESDAY, AUGUST 8, 2006 T E C H N O L O G Y AMERICAN BANKER

RESOURCE GUIDE

Editorial Inquiries 212-803-8427Customer Service 800-221-1809Subscriptions 800-221-1809Renewals 800-356-4763Advertising 212-803-8686Reprints 800-367-3989

Or go to www.americanbanker.com and click “Contact Us” to find the right person for your inquiry.

Print subscribers are entitled to all premium online services. If you already subscribe and would like

access to American Banker Online, please call 800-221-1809 to obtain user ID and password.

The definitive site for banking professionals, offering complete daily content of American Banker (posted the night before the print edition is published) and incorporating news, data, and analysis from third parties.

ArchiveSearch articles and data from the daily and sister publications by keyword, publication title, or date.

Today’s Complete IssueThe digital equivalent of a stack of newspapers on your desk, it lets users scan all articles from current or past issues.

American Banker’s Morning Scan A Web and e-mail service that filters the news you need from the major dailies. Fast, comprehensive, and focused exclusively on matters of interest to financial professionals.

American Banker TexasA online news service for financial services professionals doing business in the Lone Star state. Go to www.americanbanker.com/texas.

Ranking the Banks A comprehensive roster of league tables and industry rankings, including nearly 50 special rankings focusing on benchmarks such as efficiency and nonperforming loan ratios.

Washington/RegulatoryThis section incorporates additional features and services like filtered access to Federal Register filings, pending-activity calendars, calls for comment, and more.

Community BankingOur Community Banking page includes relevant headlines from American Banker sister publications and statistics from SNL Financial. A clickable map lets users access banking news and information by a state.

Viewpoints/LettersViewpoints/Letters online is the most convenient way to send a letter to the editor or browse past letters.

E-Mail UpdatesServices include Daily Briefing and Daily Regulatory Update plus weekly updates in Technology, Community Banking, Investment/Insurance Products, Payment Systems, and Mortgages.

ONLINEMore Banks Can ReceiveCheck Images, Poll Finds■■ BY STEVE BILLS

The number of banks and creditunions that can receive checkimages is rising sharply, furtherreducing the need to print imagereplacement documents.

Though many large banks werequick to install imaging equip-ment in recent years, they quicklyfound that they could use thetechnology only to settle transac-tions with other banks that hadthe technology, and they had touse IRDs to settle the rest. Howev-er, according to the ElectronicCheck Clearing House Organiza-tion, at the end of June nearly4,000 financial companies —almost a quarter of the industry— were ready to receive images,and most of them were small andmidsize companies.

David Walker, the Dallas clearinghouse’s president, said it was nolonger tracking the number ofcompanies that could send files,because the number of receivershas become more important.

Technically, Eccho is tracking notthe number of companies that canreceive images, but the amount ofrouting and transit numbers thatbanks are using to do so. At the endof June there were 3,990.

Most of the financial companiesreceiving images are using just asingle routing number, Mr. Walkersaid. Even large banking compa-nies, which often have numbers fordifferent regions or business units,are rolling them out one number ata time. As a result, the routingnumber total closely correlates withthe number of companies that canreceive images.

“It’s a significant number,” andone that surprises many in the

industry who had been concernedabout slow adoption of imageexchange, he said.

(Another large banking compa-ny recently started using imageexchange — The Clearing HousePayments Co. LLC announcedMonday that PNC Financial Ser-vices Group Inc. of Pittsburgh hadbegun exchanging images over itsSVPCO Image Payments Net-work. PNC is the 15th participantin the network, which connectswith the Federal Reserve Banks’image system.)

Eccho’s numbers show electron-ic clearing continuing to close in onsubstitute checks. In June, 43% ofthe 206.8 million imaged checkscleared electronically.

Eccho said $404.37 million ofpayments cleared using substitutechecks, compared with $74.75 mil-lion cleared electronically.

Mr. Walker said banks often clearhigh-dollar checks using IRDs,because of advantages such as faster

settlement, but they have beenslower to open routing numbers forhigh-value payment types — suchas controlled disbursement for cor-porate customers — to receiveimages.

“You don’t want to experimentwith high-value checks,” he said.

Still, $2.3 billion of checks werepaid in the first half using imagesfor at least part of the process, andthe value is climbing every month,Mr. Walker said.

“We’ve never had a majorchange in the payment systems ofthe U.S. that has proceeded asrapidly as this one has,” he said.“The pace of this change is reallyunprecedented.”

Aaron McPherson, the researchmanager of payments at FinancialInsights Inc., a Framingham, Mass.,unit of International Data GroupInc., said that small banks and cred-it unions are quicker to receiveimages than their large rivals.

“It is a large number, but lesssurprising if you take into accountthe size of the banks involved,” Mr.McPherson wrote in an e-mail.Small banks outsource their checkprocessing to a third party that canspread the cost of upgrading acrossits customer base, or the banks aresmall enough to use less expensivetechnology that can be replacedmore quickly.

The more extensive, often cus-tom-built, processing systems atlarge banks, make it more difficultand expensive for them to upgradeto image exchange, Mr. McPher-son said.“However, clearly they aredriving enough volume to give usthe numbers we are seeing here.These cannot be all communitybank checks.” ■

Cyphermint Unveils PayCash MobileThe electronic payment vendor

Cyphermint Inc. has developed amobile payment system linked toits prepaid cards.

People can use PayCash Mobileto initiate payments with anyInternet-capable devices, such ascell phones and computers,Cyphermint said. It can also beused from PayCash kiosks.

The Marlborough, Mass., com-pany announced PayCash Mobileon Monday. It plans to expand theservice in October by allowingpeople to fund the accounts fromother credit and debit cards.

Joe Barboza, Cyphermint’s pres-ident and chief executive, said thatthough the initial focus is on

enabling people to use the serviceto pay for goods and services, “webelieve that the real market is inperson-to-person transfers.”

PayCash Mobile can be usedonly to send money to a maxi-mum of 10 payees on a user-creat-ed list of merchants or friends.

The 10-payee limit was set tomake the tracking of payments eas-ier, in part to comply with the USAPatriot Act, Mr. Barboza said. It willbe raised if the service becomesmore widely used, he said.

There are 6 million PayCashusers, Mr. Barboza said. Consumersand merchants must have PayCashaccounts to receive payments andmust pay a 2% fee to do so.

Cyphermint’s service enters anascent but increasingly heatedlandscape for mobile payments.Pay-Pal Inc. recently brought itsservice to mobile phones and ismarketing both the person-to-per-son function and a system lettingusers of mobile phones buy itemsadvertised with a PayPal Text-to-Buy logo. PayPal, of San Jose, is aunit of eBay Inc.

Other rivals include OboPayInc. of Palo Alto, Calif., and VayusaInc. of Newton, Mass., whichoffers a service called MobileLime.Banks and mobile phone carriersare testing versions that combinemobile phone hardware with con-tactless cards. — Daniel Wolfe

Walker: Banks are still using IRDs tosettle high-dollar checks.


AMERICAN BANKER I N S U R A N C E / I N V E S T M E N T P R O D U C T S TUESDAY, AUGUST 8, 2006 13

GlobalBridge, AllyTo Aid Banks onInstitution Assets■■ BY MATT ACKERMANN

GlobalBridge Inc., a Min-neapolis open architecture man-aged account provider, says itplans to launch a platform tohelp trust banks gather institu-tional assets.

GlobalBridge said it wouldannounce a partnership todaywith Mercer Investment Con-sulting Inc., a global provider ofinvestment consulting servicesto fiduciaries of pension funds,foundations, and endowments,to give its customers investmentresearch and consulting. Thecompanies will offer the Glob-alEdge platform to help bankscompete for share in the institu-tional market.

Kelly Coughlin, Global-Bridge’s chairman and chiefexecutive officer, said banks’share of institutional assets hasbeen cut in half in the past 10years by wire houses, brokers,and other financial advisers.GlobalEdge is designed to helpbanks leverage their local pres-ence, wealth management exper-tise, and pricing advantage toattract institutional clients, hesaid.

“For trust banks to erase someof the erosion that has occurredin terms of their market share,they need to consider differenttools and different expertise,” hesaid.

The Mercer partnership willgive GlobalBridge the ability tohelp midsize trust banks attractinstitutional clients with morethan $300 million of assets, Mr.Coughlin said, and he expectshis company to use the platformto nearly double its base of cus-tomers — from 45 banks to 85by the end of next year.

He said he expects the com-pany, which was started in 2000,to reach $1 billion of assetsunder custody this quarter.GlobalBridge has $850 millionof assets and expects to reach$1.3 billion by yearend. “Ourplan is to double our assetsevery year for the next fouryears,” he said. “GlobalEdge willhelp us to do that.”

Analysts said this expectationis lofty given market conditionsand an overwhelming trendaway from banks. Mary McMa-hon, a principal and the direc-tor of relationship managementat GlobalBridge, said banks arenot losing institutional

accounts — they just are notdeveloping new ones becausethey do not offer open architec-ture with managed account ser-vices.

Prudential and Sungard arecompeting with GlobalBridge tooffer open architecture managedaccounts through banks, analystssaid. Mercer Investment Con-sulting, GlobalBridge’s new part-ner, is a unit of Mercer HumanResource Consulting, an operat-ing company of Marsh &McLennan Cos. Inc.

Mr. Coughlin said Global-Bridge would continue to lookfor growth by working withbanks that want to expand theirservice offerings. Though Glob-alBridge’s bank customers areheavily concentrated in theseven or eight states of theUpper Midwest, Ms. McMahonsaid the company will continueto look in areas with concentra-tions of trust banks.

“You’d think that Californiaand Seattle would have a lot oftrust banks, but we find moreclients in Iowa than we do inCalifornia,” she said.

Mr. Coughlin said Global-Bridge does not plan to look inany specific region for new cus-tomers. “We don’t have geo-graphic qualifications,” he said;“we have cultural qualifica-tions.”

“We are finding excellentacceptance in second-tier citiesoutside of the primary markets,”he added. “We are finding thesefirms a lot more receptive andopen-minded. We are more thanhappy to let our competitionfight for the top 25 cities and thetop 25 banks.” ■■

Coughlin aims to help “trust banksto erase [market share] erosion.”

CitiStreet Hones Products forSmall-Corporate Marketplace■■ BY STEVE GARMHAUSEN

CitiStreet is using an improvedproduct roster and a veteran salesstaff to make inroads in the com-petitive small-business retirementmarket, the unit’s chief says.

The joint venture between StateStreet Corp. and Citigroup Inc.,which was started in 2000, isknown for its bigger clients, but italso has attracted 6,000 small cor-porate clients with $20 billion ofassets, said Pat Bello, the executivevice president in charge of smallcorporate sales.

Its roster of small-plan sponsors,with assets of roughly $75 millionor less, is expected to grow by 7% ayear during the next three to fiveyears, said Mr. Bello, and assetsfrom this group will grow 7%annually as well.

Sales to small businesses rose21% in the first half of this year,and revenue from these customersrose 14% compared with a yearearlier, according to CitiStreet,which is headquartered in Quincy,Mass.

The plan sponsors are evenly dis-persed over the East and Westcoasts and in large cities inbetween, Mr. Bello said.

Denise Valentine, a senior ana-lyst at the Boston consulting firmCelent LLC, characterized getting6,000 clients in five years as “fairlyimpressive.”

Success in retaining sales talent ispart of the reason for the improve-ment, Mr. Bello said. His 17 region-al sales directors have averagetenures of seven and a half years,which is saying something in abusiness where talent is poachedregularly by competitors, he said.These tenures include time at Citi-group before CitiStreet’s start-up.

Perhaps a more important fac-tor is that the company hasfleshed out its product menu, he

said. At first CitiStreet offeredonly a variable annuity product,but it has added solutions forbusinesses of every size.

The latest addition, aimed atbusinesses with $15 million to $100million of plan assets, is Frame-wor(k), a fully bundled 401(k) pro-gram that is sold through financialadvisers at Smith Barney.

The small-plan retirement mar-ket, which has been underservedbecause small businesses lack thedeep pockets needed to afford cov-erage, is a busy area these days, Ms.Valentine said. “I think everyonehas recognized there is a gap,” shesaid. “So some of what is going onin the marketplace is heightenedawareness.”

To lure small-business clients,CitiStreet and its rivals are offeringplans that are essentially free ofcharge. The asset managers sharerevenue with the distributors sothat the plan sponsors do not haveto write a check, Mr. Belloexplained.

CitiStreet also uses a best-of-breed approach in choosing outsidemoney managers in order to attract

clients, he said. And the partnershiphas leveraged its scale — the entireenterprise has $200 billion of assetsunder management — so it canoffer small corporations servicingfeatures such as interactive Webtools, he said.

A year and a half ago, forinstance, it introduced a functionthat lets sponsors choose whichcategories of information theywant to extract from their plan,he said.

Still, the small-plan market ischallenging because of its highturnover — small businesses aremore prone to fail, Mr. Bello said.“It’s also a very predatory market-place,” he said. “Brokers and moreaggressive salespeople operating inthat space have a lot more pull.”

The turnover is such thatCitiStreet should actually increaseits small-corporate assets and plansby 10% or 11% annually but iscounting on just 7% growth as cus-tomers go out of business, he said.

Small corporate plans accountfor 10% of CitiStreet’s business, ashare that is likely to remainunchanged as the entire businessgrows, Mr. Bello said.

CitiStreet does all its own distri-bution in the small end of the mar-ket — it has not opened the door toadvisers. Mr. Bello said this maychange but not soon.

“It’s absolutely on our radar,” hesaid. “But we don’t think we’re atthe tipping point yet.”

CitiStreet still has plenty of roomto grow using its current approach,he said. Creating a corps of man-agers to oversee an adviser channelwould make the business less lucra-tive than CitiStreet’s simply goingafter the business itself, heexplained.

Mr. Garmhausen, who covered mutualfunds for American Banker from 1997 to

1999, is a freelance writer in Brooklyn, N.Y.

Bello expects 7% annual growth inhis small-business retirement unit.

IN BRIEF

Mich. Insurer’s Profit Up 51%Fremont Michigan InsuraCorp Inc., a Michigan

provider of property and casualty coverages, said Mon-day that its second-quarter earnings grew 51.2%.

Its net income was $1.4 million, or $1.62 per dilut-ed share, up from $939,000, or $1.09, the year earlier.The insurer, headquartered in Fremont, Mich., alsoreported a 0.1% decline in revenues, to $10.2 million.

Despite a 3.9% rise in net premiums earned, Fre-mont said, revenues were flat for the quarter due to adecline of $385,000 in net realized gains on invest-ments.

Direct premiums written for the quarter grew 6.3%,to $13.2 million, from a year earlier. Despite highlycompetitive and soft market conditions in Michigan,Fremont said, it continued to expand its personal auto

product line during the quarter. Direct premiums writ-ten for this product increased 23.4% in the quarter.

ProShare Hires ETF Sales ExecProShare Advisors LLC, a Bethesda, Md., exchange-

traded fund manager, announced Monday that it hadhired Robert Holderith to be a vice president and thenational sales manager for ETF products.

ProShare appointed Mr. Holderith to the newly cre-ated sales post to direct the push for its innovativeETFs. The company, which was started in June, intro-duced that month the first exchange-traded fundsdesigned to provide short exposure or magnifiedexposure to major market indexes.

Mr. Holderith was a corporate vice president at UBSFinancial Services Inc., where he worked for nine years.


14 TUESDAY, AUGUST 8, 2006 C A R E E R Z O N E AMERICAN BANKER

For more information,please visit our Web site: www.americanbanker.com

CLASSIFIED

CLASSIFIED

COMPANY INDEX

COMPANY . . . . . . . . . . PAGE

American Home Mortgage . . .16

Bank In A Box . . . . . . . . . . . .17

Banknorth . . . . . . . . . . . . . . .14

BVS . . . . . . . . . . . . . . . . . . . .17

Cargill . . . . . . . . . . . . . . . . . .15

Cavalry Investments . . . . . . . .15

Cenlar FSB . . . . . . . . . . . . . . .17

Dovenmuehle Mortgage . . . . .17

Elan Financial Services . . . . . .15

EverHome Mortgage Co. . . . .17

GMAC Mortgage . . . . . . . . . .17

Office of Thrift Supervision . . .14

Reynolds Financial Services . .17

AMERICAN BANKER MAIN 08-08-06 A 14 ABNEWS 8/7/2006 11:13 AM Page 1

AMERICAN BANKER P R O D U C T S & S E R V I C E S D I R E C T O R Y TUESDAY, AUGUST 8, 2006 15

A C Q U I S I T I O N S ( P O R T F O L I O )

Loan Portfolio Acquisitions-Top $$$ Paid!!

Cavalry buys charge-offs, sub-performing and performing portfolios, credit card and telecom receivables, auto and commercial loans.

$13 billion acquired since 1999.Contact Al Brothers at 1-888-473-3581 Ext 11018

or email: [email protected]

C R E D I T C A R D PA RT N E R S H I P S

CLASSIFIED

UPCOMINGSOURCEMEDIACONFERENCES

September 25-26, 2006American Banker’s 3rd Annual Identity Theft

and Fraud SymposiumThe Argent Hotel

San Francisco, CA

September 26-27, 20064th Annual Separately Managed Accounts

The Westin Michigan AvenueChicago, IL

October 5-6, 20067th Annual Wealth Management Forum

Renaissance Chicago HotelChicago, IL

October 4-6, 200614th Annual ATM, Debit & Prepaid Forum

The Mandalay Bay HotelLas Vegas, NV

October 11-13, 200615th Annual Card Collections Conference


October 11-13, 20064th Annual Financial Services

Marketing SymposiumLaCosta Resort & Spa

Carlsbad, CA

October 22-24, 200611th Annual Small Business

Banking ConferenceThe Hyatt Regency Baltimore on the Inner Harbor

Baltimore, MD

November 2-3, 2006Health Savings Accounts Symposium

Boca Raton Resort & ClubBoca Raton, FL

November 6-7, 2006Operational Risk Management Forum

Boston Park Plaza Hotel & TowersBoston, MA

November 28, 20064th Annual Micro & Small Payments Conference

Marriott Financial CenterNew York, NY

December 11-12, 2006Mortgage Fraud Conference


For more information, or to register,call (800) 803-3424 or (212) 803-6093

or visit our Web site at www.sourcemediaconferences.com.


16 TUESDAY, AUGUST 8, 2006 P R O D U C T S & S E R V I C E S D I R E C T O R Y AMERICAN BANKER

CLASSIFIED

M O RT G A G E S

Looking for a solution to attract banking professionals

to your event?

All you have to do is place a listing in American Banker’s Upcoming Events.

And your audience will come.

UPCOMING EVENTS

For more information, please call

John Fales at

(212) 803-8306 or

(800) 221-1910


AMERICAN BANKER P R O D U C T S & S E R V I C E S D I R E C T O R Y TUESDAY, AUGUST 8, 2006 17

“Bank In A Box”T M

FOR TEMPORARY, PERMANENT USE, DISASTER RECOVERY

FULLY EQUIPPED READY FOR USE UPON ARRIVAL

www.bank-in-a-box.com800-653-0896

FACIL IT IES

THE NATION’S LEADING SUBSERVICER

MORTGAGE SUBSERVIC ING

WA R E H O U S E L E N D I N G

CLASSIFIED


AMERICAN BANKER B A N K A N D T H R I F T S T O C K S TUESDAY, AUGUST 8, 2006 19

Top 50 Banks Index: 968.60% Change: Day -0.25 Week 1.11 Month 3.92

52-Week Div. $Hi Lo Name P/E Yld. Last Chg.

29.83 23.85 AmSouthBancorp-AL 14.1 3.6 29.26 -0.1234.94 28.87 AssociatedBanc-WI 12.5 3.7 31.35 0.0028.18 19.93 BancorpSouth-MS 16.9 2.9 27.89 0.1955.15 47.00 BankHawaii-HI 15.2 2.9 50.38 -0.1852.75 41.13 BankOfAmerCorp-NC 12.4 4.3 52.16 -0.1638.00 28.65 BankofNY-NY 15.6 2.6 34.05 0.2743.92 37.39 BB&TCorp-NC 13.5 3.9 42.77 0.1053.14 43.29 BOKFinancial-OK 17.0 1.1 52.71 -0.1090.04 71.15 CapitalOne-VA 10.6 0.1 78.44 -0.7150.72 42.91 Citigroup-NY 9.8 4.1 48.23 -0.2778.25 60.02 CityNatlCorp-CA † 14.4 2.4 67.30 0.2027.27 21.21 ColonialBancGrp-AL 15.9 2.6 26.01 0.1061.95 50.12 ComericaInc-MI 11.6 4.0 58.56 -0.0941.20 27.89 CommerceBcp-NJ 22.9 1.4 35.06 -0.7553.63 47.57 CommerceBcsh-MO 15.3 1.9 50.50 -0.4159.95 43.45 CompassBcshrs-AL 17.6 2.6 59.20 -0.1159.48 47.33 Cullen/Frost-TX 17.7 2.3 58.37 -0.5841.75 31.56 EastWestBncp-CA † 18.4 0.5 40.49 -0.1243.49 35.04 FifthThirdBcp-OH 14.8 4.1 39.21 0.2043.07 34.78 FirstHorizon-TN 10.0 4.3 42.23 -0.5317.35 14.86 FultonFinCorp-PA 16.3 3.6 16.60 -0.0724.90 20.97 HuntingtonBcshs-OH 13.5 4.1 24.47 -0.2646.80 32.92 JPMorganChase-NY 13.6 3.0 45.27 0.1538.31 30.10 KeyCorp-OH 13.3 3.7 37.64 -0.13

124.94 101.31 M&TBankCorp-NY 17.5 1.9 123.70 -0.2647.68 40.14 Marshall&Ilsley-WI 15.0 2.3 46.88 -0.0838.94 30.14 MellonFinlCorp-PA 17.8 2.4 36.00 0.0540.08 34.11 MercantileBksh-MD 16.1 3.0 37.58 0.1340.00 29.75 NationalCityCp-OH 12.7 4.2 36.73 -0.1360.44 47.60 NorthernTrust-IL 20.2 1.6 57.47 0.2130.64 23.05 NorthForkBanc-NY 15.1 3.5 28.52 -0.2272.00 54.23 PNCFinlSvs-PA 14.9 3.1 71.69 0.0227.74 16.97 Popular-PR 11.3 3.4 18.69 0.0737.36 29.16 RegionsFinCorp-AL 14.8 3.8 36.83 -0.2129.87 23.09 SkyFinlGrp-OH 13.5 3.7 24.77 -0.1966.47 47.04 StateStreetCorp-MA 22.7 1.3 61.80 -0.1080.87 65.32 SunTrustBanks-GA 13.8 3.1 79.71 -0.8929.70 25.74 SynovusFinCorp-GA 16.5 2.7 29.21 0.0328.82 24.23 TCFFinancial-MN 13.7 3.4 27.06 -0.0231.40 26.00 TDBanknorthInc-ME 18.0 3.1 28.78 0.0638.26 23.63 TexasRegional-TX 25.8 1.5 38.01 0.0171.75 59.49 UnionBanCal-CA 10.4 3.1 60.04 -0.9632.45 27.32 USBancorp-MN 12.8 4.1 32.30 -0.0127.05 20.80 ValleyNatBanc-NJ 17.8 3.4 25.67 -0.4160.04 46.30 WachoviaCorp-NC 12.6 3.7 55.48 -0.1149.55 43.23 WebsterFinancial 14.2 2.3 47.28 -0.2073.78 57.62 WellsFargo-CA 15.3 3.1 72.38 -0.6237.26 24.14 WhitneyHolding-LA 19.5 3.0 36.22 -0.4245.21 34.65 WilmingtonTrust-DE 16.6 2.9 44.12 -0.4585.25 66.67 ZionsBancorp-UT † 15.6 1.7 82.61 -0.08

Top 25 Thrifts Index: 919.80% Change: Day 0.07 Week 1.14 Month 0.31


31.95 24.43 AstoriaFinCorp-NY 14.3 3.2 30.29 0.1617.95 12.67 BankAtlanticBcp-FL 29.9 1.1 14.06 -0.0212.50 10.00 BankMutualCorp-WI 31.5 2.3 12.28 0.0416.40 12.48 BrooklineBancorp-MA 37.2 5.7 13.03 -0.0835.82 31.46 CapitolFedFin-KS 48.6 5.9 33.99 -0.1619.56 13.24 CommericalCap-CA 15.7 1.9 15.88 -0.0178.11 55.06 DowneyFinl-CA 9.5 0.6 66.87 -0.0368.44 49.05 FirstFedFinCorp-CA 8.5 0.0 57.99 -0.0618.09 12.62 FlagstarBancorp-MI 12.1 4.0 15.04 0.1527.42 24.03 FstMutualBncshs-WA 13.9 1.5 27.00 0.2215.16 13.35 FstNiagaraFinGrp-NY 17.0 3.3 14.76 0.0176.57 55.40 GoldenWestFn-CA 15.2 0.4 75.66 -0.1144.50 32.71 HarborFloridaBcp-FL 21.2 2.5 44.12 -0.0814.07 11.15 HudsonCityBancorp-NJ 25.0 2.3 12.99 0.0950.50 34.40 IndyMac-CA 9.0 4.3 44.55 0.4145.00 39.14 MAFBancorp-IL 13.0 2.5 40.80 -0.1618.23 15.69 NewYorkComBncrp-NY 18.7 6.2 16.24 -0.1326.52 19.77 NorthWestBkCorp-PA 22.1 2.9 25.23 -0.17

116.90 10.60 OcwenFinancial-FL 5.2 0.0 14.29 0.0936.59 28.17 PeoplesBank-CT 37.3 2.8 35.85 -0.0439.49 27.01 PFFBancorp-CA 17.7 1.7 39.26 0.0619.16 16.27 Provident Finl svcs-NJ 20.3 2.2 18.24 -0.1623.41 19.39 Sovereign-PA 18.6 1.5 20.94 -0.0125.07 21.11 WashingtonFed-WA 13.9 3.6 22.50 -0.2747.01 36.64 WashMutualInc-WA 12.7 4.6 45.05 0.09

Midwestern Banks Index: 1131.80 % Change: Day -0.30 Week 0.23 Month 1.27


30.81 19.01 1stSourceCorp-IN 18.6 1.9 29.51 0.3532.25 26.80 AmcoreFinancial-IL 17.0 2.6 28.93 0.1931.99 19.75 AmesNatlCorp-IA 14.8 5.0 20.71 -0.0248.80 39.17 BancFirstCorp-OK 17.7 1.3 48.45 0.1447.22 29.10 CapitolBancorp-MI 16.5 2.4 41.09 -0.0834.50 28.56 ChemicalFinCorp-MI 14.9 3.7 29.75 -0.1530.98 23.25 CitizensBanking-MI 13.7 4.5 25.86 -0.2438.51 30.12 CommunityTrust-KY 15.2 2.8 37.47 0.3133.73 22.07 CorusBkshrs-IL 7.8 3.5 22.76 -0.1634.25 28.54 FarmersCapital-KY 14.0 4.1 32.18 -0.0721.25 18.03 FirstBuseyCorp-IL 15.8 3.1 20.86 0.0119.36 14.09 FirstFinBanc-OH 25.2 4.2 15.38 0.1332.20 25.24 FirstFnclCorp-IN 17.4 2.7 30.82 -0.1729.24 23.99 FirstIndianaCrp-IN 12.5 3.2 25.06 0.1028.54 20.89 FirstMerit-OH 14.5 5.0 22.23 0.0339.25 32.62 FirstMidwest-IL 16.2 3.1 35.71 -0.0938.31 25.51 FirstOakBrook-IL 24.6 2.0 36.47 -0.2029.42 22.20 FrstMerchantsCp-IN 14.2 3.9 23.36 0.1115.16 12.58 GermanAmerican-IN 14.4 4.3 13.11 -0.2032.61 25.05 GreatSouthern-MO 14.2 2.2 27.54 0.1829.93 25.04 IndependentBk-MI 12.7 3.0 26.39 0.0425.23 19.47 IntegraBankCorp-IN 15.6 2.8 24.40 0.0023.32 17.92 IrwinFinlCorp-IN 15.7 2.3 19.10 -0.1124.85 19.00 Lakeland FinCorp-IN 16.0 2.0 24.55 -0.0719.50 16.15 Mainsource FinGrp-IN 12.8 3.4 16.59 -0.1639.98 33.00 MBFinancial-IL 15.5 2.0 35.31 -0.2744.30 35.29 MercantileBkCorp-MI 17.0 1.3 39.60 -0.2826.65 20.25 MidwestBancHlds-IL 17.5 2.3 22.28 -0.1723.24 18.57 OldNatlBancorp-IN 19.0 4.4 18.99 -0.0933.64 28.00 OldSecondBncrp-IL 15.0 1.9 30.06 0.32

118.77 92.13 ParkNatlCorp-OH 15.2 3.6 101.92 0.1931.73 25.40 PeoplesBancorp-OH 14.2 2.8 29.96 -0.1147.51 32.38 PrivateBancorp-IL 26.5 0.5 45.24 -0.1113.59 10.34 RepublicBancorp-MI 14.7 3.3 13.20 -0.1022.34 18.14 RepublicBncorp-KY 13.8 1.9 20.70 -0.2827.00 18.36 SouthwestBancor-OK 16.0 1.3 25.76 -0.5529.82 20.95 SYBancorp-KY 18.3 2.0 27.92 -0.2043.18 30.75 TaylorCapGrp-IL 11.1 0.8 31.66 -0.0835.44 30.51 UMBFinCorp-MO 24.8 1.5 34.23 -0.2219.98 15.24 WestBancCorp-IA 14.6 3.9 16.38 -0.2659.64 46.14 WintrustFinl-IL 16.7 0.6 48.41 -0.54

Southern Banks Index: 1462.00 % Change: Day -0.67 Week 0.20 Month 3.07


70.80 59.35 AlaNatBancorp-AL 16.8 2.2 67.71 -0.7727.10 17.57 AmerisBncrp-GA 19.6 2.1 26.31 -0.3424.50 19.29 BancsharesFlor-FL 23.1 0.0 21.50 -0.1528.25 17.01 BanctrustFin-AL 18.1 2.0 26.38 -0.6422.24 17.51 BankGraniteCorp-NC 17.1 2.6 21.40 -0.3238.71 29.49 BankoftheOzarks-AR 16.2 1.3 31.49 -0.4417.00 14.74 CapitalBk-NC 16.8 1.4 17.00 0.2539.33 29.51 CapitalCityBkGp-FL 18.5 2.1 31.52 -0.1813.68 8.94 CardinalFinlCorp-VA 24.3 0.4 10.71 -0.1839.70 32.68 CityHoldingCo-WV 13.4 2.9 39.22 0.3040.00 33.17 CommercialBkshs-FL 18.1 2.2 35.90 -0.1919.38 16.40 FidelitySouthn-GA 16.9 1.7 18.72 0.4023.90 19.32 FirstBancorp-NC 20.5 3.5 20.68 -0.2426.95 22.04 FirstCharterCp-NC 27.3 3.3 23.49 -0.50

217.79 159.22 FirstCitizens-NC 18.5 0.5 208.99 3.0634.72 19.64 FirstSouth Bancorp-NC 20.2 2.1 33.00 -0.7521.50 17.35 FNBCorp-NC 10.5 3.3 18.08 -0.3639.00 26.10 FNBCorp-VA 14.3 2.3 35.80 -0.8916.59 13.62 GatewayFinl Hldg-NC 28.3 1.4 14.49 -0.0135.42 25.09 GreeneCntyBnsh-TN 17.8 1.8 34.34 0.0057.19 29.93 HancockHldgCo-MS 27.1 1.7 52.83 -0.4061.50 47.92 IberiaBkCorp-LA 24.8 2.1 58.19 -0.4125.36 21.74 NationalBancshrs-VA 12.9 3.1 23.01 0.0025.81 19.57 NbcCapitalCorp-MS 13.3 4.8 20.98 0.3234.61 21.70 PinnacleFinPartnrs-TN 35.7 0.0 34.26 -0.0838.00 30.81 SCBT Fin-SC 17.0 1.9 36.51 -0.4330.84 21.02 SeacoastBanking-FL 22.6 2.0 30.23 -0.4826.00 21.07 SecurityBankCorp-GA 16.6 1.3 22.71 -0.0330.36 25.00 SimmonsFirstNatl-AR 14.9 2.4 28.10 -0.7330.28 24.60 SouthFinlGrp-SC 31.8 2.5 27.00 -0.1133.71 28.88 TIBFinancial-FL 14.5 1.5 31.71 -0.2132.76 24.00 TrustmarkCorp-MS 15.8 2.6 32.16 -0.1150.15 38.26 UnionBankshares-VA 14.9 2.1 43.36 -0.9232.50 24.50 UnitdSecBncshrs-AL 12.6 3.3 27.93 0.7538.55 32.34 UnitedBkshrs-WV 15.3 3.0 36.19 0.02

33.10 25.32 UnitedComm-GA 20.8 1.0 32.00 -0.3732.92 25.59 WesBanco-WV 17.2 3.6 29.06 -0.14

Western Banks Index: 1653.40% Change: Day -0.59 Week -0.51 Month 0.68


26.86 20.67 AmericanWest-WA 18.2 0.6 21.47 -0.3435.25 30.47 BankMarin-CA 14.4 1.6 30.70 -0.0940.44 25.89 BannerCorp-WA 25.4 1.8 39.41 -0.5544.38 27.11 BWCFinlCorp-CA 18.5 1.0 40.52 -0.5836.75 29.00 CapitalCorpWest-CA 15.2 1.0 31.37 -0.1535.57 19.95 CascadeBancorp-OR 23.0 1.0 34.31 -0.2639.95 32.62 CathayBancorp-CA 17.1 1.0 36.92 -0.4413.05 9.30 Centennial Bank-CO 24.7 0.0 10.13 -0.0440.15 31.87 Centralpacfinl-HI 14.3 2.6 35.85 -0.0434.75 28.87 CmtyBancorp-NV 19.4 0.0 33.70 -0.2923.96 17.00 CoBizInc-CO 24.0 1.1 22.83 0.2027.45 18.09 ColumbiaBancorp-OR 16.7 1.7 23.63 -0.1737.39 24.11 ColumbiaBank-WA † 15.4 1.9 30.81 -0.6944.50 31.50 CommunityBncp-CA 17.9 1.3 39.68 -0.4717.30 13.77 CVBFinCorp-CA 16.3 2.5 14.59 -0.1461.65 45.07 First Cmnty Bancorp-CA 17.5 2.3 54.92 -0.6139.48 32.20 FirstFinlBnkshrs-TX 17.8 3.2 37.82 -0.53

100.28 66.50 FirstRegional-CA 12.5 0.0 95.76 -2.1446.02 33.31 FirstRepublicBk-CA 19.1 1.4 42.44 -0.6127.47 20.25 FirstStateBanc-NM † 18.6 1.3 25.06 -0.1239.98 26.00 FrontierFinlCorp-WA 18.7 1.9 38.67 -0.0633.50 27.82 GlacierBcp-MT 18.2 2.0 31.45 -0.1531.08 22.35 GreaterBayBncp-CA 16.1 2.2 28.23 -0.7520.46 16.51 HanmiFinCorp-CA 15.6 1.3 19.03 -0.1425.16 19.08 HeritageCommerce-CA 17.0 0.8 23.90 0.0329.33 20.53 HeritageFinlCorp-WA 16.6 3.0 27.10 0.5515.75 11.97 HomeFedBncorp-ID 31.8 1.5 14.31 -0.0730.81 27.48 InterntnlBncshrs-TX 14.0 2.5 27.94 -0.2933.20 22.87 MetrocorpBcshs-TX 18.8 0.8 31.74 0.2819.87 13.50 NaraBancp-CA 15.0 0.6 18.33 -0.3438.47 28.63 PacificCapitalBncp-CA 13.3 3.0 29.59 -0.0920.00 14.55 PacificMercBancorp-CA 27.5 0.0 17.30 -0.3936.00 27.97 ProsperityBnchs-TX 19.1 1.1 35.09 -0.1154.78 43.73 SiliconValley-CA 20.4 0.0 45.17 0.2225.94 16.46 SouthsideBncshs-TX 22.2 1.8 24.70 -0.0520.18 13.53 SterlingBncshrs-TX 21.9 1.4 19.91 -0.0133.11 21.66 SterlingFinl-WA 18.6 0.9 32.75 -0.1528.94 16.78 SummitBancshare-TX 27.4 1.1 27.94 -0.2728.38 20.75 TriCoBancshares-CA 15.6 2.0 24.57 -0.6919.70 15.55 UCBHHoldings-CA 16.0 0.7 16.66 -0.1629.67 22.58 UmpquaHolding-OR 16.1 1.8 26.63 -0.3955.48 45.44 Westamerica-CA 14.5 2.7 48.20 -0.4731.19 23.29 WestCoastBancp-OR 17.1 1.4 29.89 -0.03

Middle Atlantic Banks Index: 764.40% Change: Day 0.03 Week 0.30 Month -1.92


28.00 9.72 AmerBkCorp-NJ 30.9 1.3 12.05 -0.0429.64 23.82 ArrowFinlCorp-NY 15.4 3.7 26.28 0.0912.30 9.90 BrooklynFedBncorp-NY 36.6 0.0 12.08 0.0325.25 20.75 BrynMawrBkCorp-PA 15.9 2.2 21.98 -0.0215.20 10.51 CenterBancorp-NJ 47.6 2.4 14.75 0.0011.07 10.01 CliftonSvgsBancorp-NJ 98.5 1.8 10.83 -0.0728.47 23.34 CommunityBanks-PA 14.7 3.1 25.73 0.0524.68 18.75 CommunityBkSys-NY 15.7 3.5 21.76 0.1215.37 4.70 Doral Financial-PR 3.4 6.3 5.10 0.0721.98 15.52 FinancialInst-NY 12.7 1.5 21.80 1.1523.69 8.59 FirstBancorp-PR 4.9 2.8 9.95 0.3714.70 12.14 FirstCmnwlthFinl-PA 17.5 5.4 12.58 -0.1330.20 23.18 FirstCommtyBncrp-PA 38.7 1.6 28.00 -0.1045.10 40.26 FirstLongIsland-NY 14.3 2.1 43.89 -0.1119.18 15.15 FNBCorp-PA 17.1 5.8 16.21 -0.1626.43 18.68 HarleysvilleNat-PA 15.0 3.7 20.39 -0.0822.77 15.60 Interchange-NJ 22.8 1.8 22.54 -0.0617.02 14.15 KNBT Bancorp-PA 20.3 2.0 15.65 -0.1315.56 12.66 LakelandBncp-NJ 16.0 2.8 14.35 -0.1323.18 18.05 NationalPenn-PA 14.2 3.4 19.54 -0.30

24.67 20.75 NBTBankcorp-NY 14.6 3.2 23.67 0.0534.21 25.42 OmegaFinancial-PA 17.5 4.2 29.76 0.0014.52 10.30 OrientalFinlGroup-PR 11.1 4.5 12.42 -0.1336.68 25.71 PennCommBancp-PA 22.5 0.0 27.69 0.0438.08 32.15 ProvidentBkshrs-MD 16.1 3.2 37.25 -0.1714.40 10.70 PrudentialBkcp-PA 42.7 1.2 13.25 -0.0815.98 7.65 R&GFinancial-PR 2.9 5.3 8.24 0.2226.74 21.57 RoyalBncshsPA-PA 10.8 4.3 25.75 0.0539.54 30.56 S&TBancorp-PA 15.1 3.7 31.00 -0.1038.55 31.51 SandySpringBcp-MD 15.3 2.5 34.81 -0.2330.12 20.10 SantanderBcp-PR 16.3 2.7 23.31 -0.5820.65 16.46 Severn Bancorp-MD 11.0 1.3 19.11 -0.4420.00 13.02 StateBancorp-NY NM 3.0 19.72 0.7723.15 17.05 SterlingBancorp-NY 15.9 3.9 19.34 0.0922.64 18.02 SterlingFinanCorp-PA 15.4 2.6 21.42 -0.1437.00 27.01 SuffolkBancorp-NY 14.4 2.8 31.28 -1.4820.95 15.96 SunBancorp-NJ 20.5 0.0 17.55 -0.0126.67 22.01 SusquehannaBcsh-PA 14.0 4.0 24.28 -0.2846.53 36.81 TompkinsCtyTr-NY 15.9 2.8 42.70 -0.0113.47 10.40 TrustCoBankCorp-NY 15.0 5.9 10.89 -0.0823.64 20.51 USBHoldingCo-NY 15.7 2.5 22.45 -0.0310.55 5.02 W.HoldingCo-PR 10.3 3.5 5.43 0.0039.19 32.25 YardvilleNatl-NJ 19.3 1.3 34.41 0.20

Northeastern Banks Index: 1182.70% Change: Day -0.55 Week -0.36 Month 1.96


42.30 32.53 BankRhodeIsland-RI 24.9 1.4 41.75 0.0635.16 24.17 BostonPrivate-MA 17.1 1.3 24.90 -0.0230.30 24.47 ChittendenCorp-VT 15.6 2.8 28.13 -0.2620.40 15.50 FirtNationalLincoln-ME 13.6 3.4 17.63 0.0034.55 26.50 IndependentBkCp-MA 15.5 1.9 33.72 0.0628.00 23.35 MerchantsBcshrs-VT 13.6 4.6 24.23 -0.0215.10 13.55 NewAllience-CT 29.9 1.7 14.05 -0.1340.50 27.62 NewMilBanCorp-CT 19.6 2.2 40.28 0.1815.40 12.67 RockvilleFinl-CT NM 0.0 14.37 -0.0329.98 24.01 WashTrustBanc-RI 14.7 2.9 26.05 0.03

Specialty Finance Companies

Gov’t Sponsored Enterprises Index: 1556.20% Change: Day 0.17 Week -0.48 Month -2.18


58.60 41.34 FannieMae-DC 6.0 2.2 47.46 -0.0532.47 22.44 FarmerMac-DC 11.6 1.4 27.84 -0.2168.75 54.50 FreddieMac-VA 13.4 3.2 57.93 0.33

Private Mortgage Companies Index: 954.90% Change: Day -1.35 Week 3.25 Month -2.77


43.67 29.34 Countrywide-CA 8.6 1.6 36.91 -0.4951.97 30.22 New Century Fin-CA 6.0 16.0 46.17 -0.83

General Finance Index: 666.50% Change: Day -0.37 Week 0.32 Month -1.81


32.24 25.65 Allied Capital Corp.DC 7.0 8.5 29.02 0.1555.00 46.59 AmericanExpress-NY 18.2 1.2 52.10 -0.1131.70 21.31 AmeriCreditCorp-TX 12.3 0.0 24.81 -0.4130.12 24.16 FinancialFederal-NY 17.0 1.5 27.17 -0.0458.26 20.89 FirstMarblehhead-MA 14.2 1.0 45.90 0.2024.87 16.78 Fremont General-CA 4.9 2.5 17.70 -0.3058.35 48.88 SLMHoldingCorp.-DC 13.0 2.0 50.28 -0.33

HIGHLIGHTS: Monday, August 7, 2006

THE TABLE LISTS daily composite stock prices at the close (unlessotherwise noted) for the 225 largest publicly traded commercialbanking firms and the 25 largest publicly traded thrifts as measuredby the market value of all common shares outstanding The table alsolists major financial services companies by industry type. 52 Wk HiLo is the moving 52-week high and low closing prices for the stock.PE represents the current stock price divided by the trailing four-quarter earnings per share adjusted for the latest announced earn-ings. The ratio is annualized for companies with less than four quar-ters of data. Mkt. to book is the ratio of the current day’s closingprice to the stock’s book value, expressed as a percentage. Last is theprice at which the stock is last traded. If no trades for the day, thelatest bid. AB Bank and Thrift Indices are market-value weightedaverages of the top 225 banks in market value and the top 25 thriftsin market value, respectively. The Top 50 Banks Index is a weightedaverage of the top 50 banks in market value. The 175 banks in the

AB Bank Index which do not fall into the Top 50 are divided into fiveregional groups and each region has a weighted average indexassigned to it: the Northeastern Banks Index, the Middle AtlanticBanks Index, the Southeastern Banks Index, the Midwestern BanksIndex, and the Western Banks Index. The Credit Card CompaniesIndex, and the Mortgage Companies Index are weighted averages ofselected publicly traded firms in each of these industries. The GSEIndex is a weighted average of Fannie Mae and Freddie Mac and theSpecialty Indexes are weighted averages of selected specializedfinancial services firms. Highlights shows the largest percentagegains/losses in price and two volume indicators: most shares tradedand today’s volume as a percentage of average shares traded dailyover the past year. N/M = not meaningful, N/A = not available. Pricesunchanged from the previous day’s or week’s close are indicated with“...”. The dagger symbol ( †) means ex-dividend.

Data Source: Thomson Financial

TOP LOSERS %SuffolkBancorp-NYGreaterBayBncp-CASantanderBcp-PRFirstSouth Bancorp-NCColumbiaBank-WA †CommerceBcp-NJSouthwestBancor-OKFirstCharterCp-NCNaraBancp-CANew Century Fin-CA

VOLUME AS % OF AVERAGEHeritageFinlCorp-WA

OcwenFinancial-FLAmerBkCorp-NJ

FinancialInst-NYFirstSouth Bancorp-NC

BannerCorp-WACapitalBk-NC

AmerisBncrp-GAYardvilleNatl-NJ

HarborFloridaBcp-FL

Percentage ChangesComputed from the indexes reported one,five and 20 days previous, respectively

Value Day Week Month

American BankerBank Index 2,452.4 –0.6 +1.0 +3.9Thrift Index 919.8 +0.1 +1.1 +0.3

S&P 500Composite Index1,275.8 –0.3 –0.1 +0.7

TOP GAINERS %FinancialInst-NYFirstBancorp-PR

R&GFinancial-PRHeritageFinlCorp-WA

CapitalBk-NCDoral Financial-PR1stSourceCorp-IN

OldSecondBncrp-ILFlagstarBancorp-MI

IndyMac-CA


20 TUESDAY, AUGUST 8, 2006 M A R K E T S AMERICAN BANKER

Improved Outlook for Several in Puerto Rico■■ BY LAURIE KULIKOWSKI

Puerto Rican banking stocksreceived a lift Monday when ananalyst upgraded five of theisland’s companies.

Thomas J. Monaco, an analystat Sterne Agee & Leach Inc., wrotein a research note that eventhough the next six months willbe “extremely challenging” forbanking companies in PuertoRico, there is “enough positivemomentum” to upgrade severalcompanies.

He said he visited several of thecompanies last week and believesthe banking market there is ripe forconsolidation.

Mr. Monaco raised his rating to“buy,” from “hold,” on three SanJuan companies — R&G FinancialCorp., the $48.6 billion-asset Pop-ular Inc., and the $2.4 billion-assetEurobancshares Inc. He upgradedFirst BanCorp of San Juan and WHolding Co. Inc. of Mayaguez to“hold,” from “sell.”

He did not downgrade any com-panies. He maintained a “sell” rat-ing on the $19 billion-asset DoralFinancial Corp. and a “hold” ratingon Santander BanCorp and Orien-tal Financial Group Inc.

Several Puerto Rican companies,including Doral, R&G, and FirstBanCorp, have been embroiled in ascandal that started at Doral earlylast year over its accounting forinterest-only strips. The companieshave been compelled to restate sev-

eral years’ worth of earnings. Doralhas already done so. A spokesmanfor First BanCorp said it expects todo so this summer. R&G has saidit’s likely to restate next quarter.

In addition to his note on theupgrades, Mr. Monaco wrote noteson each of the companies. In hisnote on R&G, he wrote that itsfinancial and legal problems are“substantially more manageable”than those of Doral, and thatR&G’s Florida subsidiary has “sub-stantially more value than that ofDoral in New York.”

R&G also has managed to main-tain its No. 2 market share inmortgage originations in PuertoRico.

The island is experiencing a fis-cal and economic crisis that couldcause consumer lending and possi-bly commercial and mortgagelending to slow and hurt the creditquality of all its banks.

But Mr. Monaco said in aninterview Monday that animproved economic and politicalenvironment, combined with theexpectation that the accountingissues will be resolved soon, has lefthim “a little less pessimistic” thanhe had been on the sector.

“The government has certainlyput a Band-Aid on the fiscal situa-tion by adding a 7% sales tax.Unemployment has stabilized, andauto sales have improved …[from] their lows in May,” he said.“We’re probably a couple weeks to

a couple months away from gettingthese mortgage accounting issuesput behind us.”

He expects some consolidationover the next six to 12 months. Hesaid that R&G and First BanCorpmay sell themselves and that Doralmay sell certain assets. He wouldnot speculate on a possible buyer,except to say that it would be“another Puerto Rican bank.”

Though he would not name anynames in the interview, he wrote inhis note on Santander that hebelieves it is interested in makingdeals on the island — whether awhole-bank purchase, “franchiseacquisitions, or certain asset pur-chases.”

First BanCorp has “taken somepositive steps to ensure the organi-zation’s viability and to avoid” apossible delisting of its stock fromthe New York Stock Exchange, hewrote in a note.

Mr. Monaco wrote in his noteon W Holding that his upgrade ofthe $16.7 billion-asset holdingcompany for Westernbank PuertoRico and Westernbank InsuranceCorp., was “most difficult.” He hasnumerous concerns about thecompany, including an “unresolvedSEC investigation, credit quality,… [net interest margin] compres-sion, a large unrealized securitiesportfolio loss not reflected in equi-ty, and the move to a Florida mar-ket,” where the company has “verylittle knowledge.”

But he wrote that the optimismon the island’s economic improve-ment, coupled with anecdotal evi-dence, “suggests that we shouldtake a breather on our negative rat-ing on the name for now.”

Carmen Casellas, a spokes-woman for W Holding, took issuewith several points in Mr. Mona-co’s note on the company.

She said that the SEC investiga-tion “is very old” and had to dowith purchases of corporate bondand loan obligations the companyfound to have credit problems. “Sowe asked permission to hold themfor sale, and we sold them,” Ms.Casellas said. “We thought we haddone absolutely the correct thing,

and instead the SEC launched aninvestigation,” on which the regula-tors have not asked any informa-tion in close to two years.

She rejected Mr. Monaco’s opin-ion that the company is not famil-iar with the Florida market.

Not everyone is as optimisticabout Puerto Rico as Mr. Monaco.

Keri McGreevy, an analyst atBrean Murray, Carret & Co., saidthat the island’s banking market isstill too uncertain, and thatinvestors should not commitmoney there.

“We don’t feel the island is outof the economic frying pan,” Ms.McGreevy said. “Puerto Rico couldbe heading into a recession, andthe local banks are knee deep infunding cost pressures and deterio-rating credit quality.” Any rally inthe Puerto Rican banking stockscould be “short lived.”

Alan Cohen, a spokesman forFirst BanCorp, said it was “com-forting to see that the analyst com-munity is seeing Puerto Rico in anew light — and that there is lightat the end of the tunnel.”

Popular would not discuss Mr.Monaco’s note. R&G andEurobancshares did not returnphone calls before press time.Santander did not comment bypress time.

On Monday, First BanCorp’sshares rose 3.9%, R&G 2.7%, Pop-ular 0.4%, and Eurobancshares5.1%. W Holding’s stock was flat. ■

3July

10 17 724 1Aug.

Source: Bloomberg

$8.8

8.6

8.4

8.2

8.0

7.8

7.6

UpgradedR&G Financial’s share price

$8.24at closeMonday

IN BRIEF

9% Earnings Drop at Anchor of Wis.Anchor BanCorp Wisconsin Inc. on Monday reported a

9% year-over-year drop in earnings for its fiscal first quar-ter, to $10.6 million.

The Madison company’s diluted earnings per share forthe three months, which ended June 30, fell 6%, to 49 cents.That missed estimates by 4 cents, according to ThomsonFinancial.

The $4.4 billion-asset company said its earnings fellbecause it did fewer real estate development projects in Cal-ifornia. Income from real estate development partnershipsfell 61%, to $4.5 million. That lowered noninterest incomeby 29%, to $13.3 million.

Anchor’s net interest income after provisions for loanlosses fell 1%, to $31.6 million. Its loan-loss provision wasup 355%, to $1.2 million. — Ben Jackson

Greater Bay Cut to ‘Market Perform’Greater Bay Bancorp of East Palo Alto, Calif., was down-

graded Monday by an analyst who expressed concern aboutits net interest margin and its insurance business.

On Friday the $7.4 billion-asset Greater Bay reported asecond-quarter profit of $25.1 million, up 11% from a yearearlier. Earnings per share rose 8 cents, to 46 cents, beatingWall Street’s expectations by 4 cents.

But analysts calculated that excluding unusual items,core earnings were anywhere from 44 cents to 38 cents.The company said its net interest margin contracted 9basis points in the quarter from the first and 1 basis pointfrom a year earlier, to 4.26%, and said its ABD Insuranceand Financial Services unit is facing an industrywide

weakness in premiums.In a report issued Monday, Manuel Ramirez of Keefe,

Bruyette & Woods Inc. lowered his rating on Greater Bay’sshares to “market perform” from “outperform.”

“Our revisions primarily reflect a lower NIM andreduced earnings contribution from ABD, offset partiallyby better expense discipline at the bank level and lowercredit costs,” the report said.

Greater Bay’s shares are nearly fully valued, but the com-pany could improve earnings by cutting costs, Mr. Ramirezwrote. — Jim Cole

Fed Reports Brisk Credit GrowthU.S. consumer credit expanded at a rapid clip in June,

led by gains in revolving credit, the Federal Reserve saidMonday.

Consumer credit outstanding rose $10.3 billion in June,to $2.18 trillion, according to the latest report from theFed. That followed a $5.9 billion consumer credit increasein May, previously estimated as a $4.4 billion expansion.

June credit growth was well above Wall Street estimatesfor a $3.8 billion expansion during the month.

The consumer credit data exclude home mortgagesand other real estate-secured loans. They tend to be high-ly volatile from month to month and are frequentlyrevised.

The latest report shows that in June householdsincreased nonrevolving credit, such as car and boat loans.

Nonrevolving credit grew $3.6 billion, to $1.366 trillion.That followed a $1.5 billion drop in May, previouslyreported as a decline of $2.2 billion.

Revolving debt, which mainly reflects credit card financ-

ing, grew $6.6 billion, to $820.7 billion. That followed a$7.4 billion increase in May, marking the sharpest two-month rise since September-October 2004. Consumercredit over all grew in June at a seasonally adjusted annu-al rate of 5.7% following May’s 3.3% rise. — Dow Jones

Intervest-Mortgage Buys in Calif.Intervest-Mortgage Investment Co., a unit of Sterling

Financial Corp. of Spokane, has acquired the $625 millionservicing portfolio, the name, and other assets of the Oak-land, Calif., commercial mortgage bank Mason-McDuffieFinancial Corp.

Sterling did not say how much it paid. The deal closedJuly 31 and was announced Friday.

Intervest will operate under the Mason-McDuffie namein northern California, where the Oakland firm had beendoing business since 1887. Campbell O’Neill, who has beenwith Mason-McDuffie for 35 years, was named the unit’spresident.

The unit opened a Sacramento office in 2004 and sincethen has made more than $450 million of construction andinterim loans in northern California.

ClarificationIn the Aug. 7 paper, a story on page 17, “U.S. Ban-

corp to Phase Out Money Transfers via ATMs,” saidthat Bank of America had discontinued a similarprogram but did not say that it continues to offerremittances under the SafeSend brand. Recipientsmust pick up the funds over the counter.


subscriptions: tuesday

Documents